INDENTURE dated as of July 24, 1998 among Continental Resources, Inc.,
an Oklahoma corporation (the "COMPANY"), as issuer, the Subsidiary Guarantors
(as hereinafter defined) as guarantors and United States Trust Company of New
York, as trustee (the "TRUSTEE").
The Company, the Subsidiary Guarantors and the Trustee agree as
follows for the benefit of each other and for the equal and ratable benefit
of the Holders (as hereinafter defined) of the 10 1/4% Senior Subordinated
Notes due 2008 of the Company (the "INITIAL SECURITIES"), and if and when
issued in exchange for Initial Securities as provided in the Registration
Rights Agreement (as hereinafter defined), the Company's 10 1/4% Senior
Subordinated Notes due 2008 (the "EXCHANGE SECURITIES" and, together with the
Initial Securities, the "SECURITIES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1. DEFINITIONS.
"ACQUIRED DEBT" means, with respect to any specified Person (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"APPLICABLE PREMIUM" means, with respect to a Security at the
redemption date, the greater of (i) 1% of the principal amount of such Security
and (ii) the excess of (A) the present value at such time of (1) the redemption
price of such Security at August 1, 2003, as set forth in Section 3.7, PLUS (2)
all required interest payments (excluding accrued but unpaid interest) due on
such Security through August 1, 2003, computed
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using a discount rate equal to the Treasury Rate plus 50 basis
points, over (B) the then-outstanding principal amount of such Security.
"ASSET SALE" means (i) the sale, lease, conveyance or other
disposition by the Company or any of its Restricted Subsidiaries (but excluding
the creation of a Lien) of any assets including, without limitation, by way of a
sale and leaseback; PROVIDED that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole shall be governed by Sections 4.13 and/or 5.1
hereof and not by Section 4.10 hereof), and (ii) the issue or sale by the
Company or any of its Restricted Subsidiaries of Equity Interests of any of the
Company's Subsidiaries (including the sale by the Company or a Restricted
Subsidiary of Equity Interests in an Unrestricted Subsidiary), in the case of
either clause (i) or (ii), whether in a single transaction or a series of
related transactions (a) that have a fair market value in excess of $5.0 million
or (b) for net proceeds in excess of $5.0 million. Notwithstanding the
foregoing, the following shall not be deemed to be Asset Sales: (1) a transfer
of assets by the Company to a Wholly Owned Restricted Subsidiary of the Company
or by a Wholly Owned Restricted Subsidiary of the Company to the Company or to
another Wholly Owned Restricted Subsidiary of the Company, (2) an issuance of
Equity Interests by a Wholly Owned Restricted Subsidiary of the Company to the
Company or to another Wholly Owned Restricted Subsidiary of the Company, (3) the
making of a Permitted Investment or a Restricted Payment that is permitted by
Section 4.7 PROVIDED that the sale, lease, conveyance or other disposition by
the Company or any of its Restricted Subsidiaries of an Investment shall be
deemed an Asset Sale, (4) the abandonment, farm-out, lease or sublease of
undeveloped oil and gas properties in the ordinary course of business, (5) the
trade or exchange by the Company or any Restricted Subsidiary of the Company of
any oil and gas property owned or held by the Company or such Restricted
Subsidiary for any oil and gas property or interest therein 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 the second and third paragraphs in
Section 4.10 which the Board of Directors of the Company determines in good
faith to be of approximately equivalent value, (6) the sale or transfer of
hydrocarbons or other mineral products in the ordinary course of business, (7)
the sale of oil and gas properties in connection with tax credit transactions
complying with Section 29 or any successor or analogous provisions of the
Internal Revenue Code of 1986, as amended (the "Code") or (8) the sale or
transfer of surplus or obsolete equipment in the ordinary course of business.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such
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transaction, determined in accordance with GAAP) of the obligation of the
lessee for net rental payments during the remaining term of the lease
included in such sale and leaseback transaction (including any period for
which such lease has been extended or may, at the option of the lessor, be
extended.
"BANKRUPTCY CODE" means Title 11 of the United States Code, as
amended.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or a
Subsidiary Guarantor, as applicable, or any authorized committee of such Board
of Directors.
"BORROWING BASE" means, as of any date, the aggregate amount of
borrowing availability as of such date under all Credit Facilities that
determines availability on the basis of a borrowing base or other asset-based
calculation.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company or similar entity, any membership or similar interests therein and (v)
any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"CASH EQUIVALENTS" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than twelve months from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of twelve months or less
from the date of acquisition, bankers' acceptances with maturities not exceeding
twelve months and overnight bank deposits, in each case with any lender party to
any of the Credit Facilities or with any domestic commercial bank having capital
and surplus in excess of $500 million and a Xxxxxxxx Bank Watch Rating of "B" or
better, (iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications specified
in clause (iii) above, (v) commercial paper having a rating of at least P1 from
Xxxxx'x and a rating of at least A1 from S&P, and (vi) investments in money
market or other mutual funds
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substantially all of whose assets comprise securities of types described in
clauses (ii) through (v) above.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(i) prior to the first public offering of Voting Stock of the Company,
either (x) Permitted Holders cease to be the "beneficial owner(s)" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the total voting power of the Voting Stock
of the Company, or (y) Permitted Holders cease to be entitled by voting
power, contract or otherwise to elect or cause the election of directors of
the Company having a majority of the total voting power of the Board of
Directors, in each case, whether as a result of issuance of securities of
the Company, any merger, consolidation, liquidation or dissolution of the
Company, any direct or indirect transfer of securities by any Permitted
Holder or otherwise (for purposes of this clause (i) and clause (ii) below,
Permitted Holders shall be deemed to beneficially own any Voting Stock of
an entity (the "specified entity") held by any other entity (the "parent
entity") so long as the Permitted Holders beneficially own, directly or
indirectly, a majority of the Voting Stock of the parent entity;
(ii) following the first public offering of Voting Stock of the
Company, any "Person"(as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than one or more Permitted Holders, is or becomes
the beneficial owner (as defined in clause (i) above, except that a Person
shall be deemed to have "beneficial ownership" of all shares that any such
Person has the right to acquire within one year), directly or indirectly,
of more than 50% of the Voting Stock of the Company; PROVIDED that the
Permitted Holders beneficially own (as defined in clause (i) above),
directly or indirectly, in the aggregate a lesser percentage of the Voting
Stock of the Company than such other Person and do not have the right or
ability by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors;
(iii) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole to any "Person" or group of
related Persons (a "Group"); (as such term is used in Sections 13(d) and
14(d) of the Exchange Act);
(iv) the adoption of a plan relating to the liquidation or dissolution
of the Company; and
(v) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with
any new directors
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whose election by such Board of Directors or whose nomination for election
by the shareholders of the Company was approved by a vote of a majority of
the directors of the Company then still in office who were either directors
at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office.
"COMMISSION" means the Securities and Exchange Commission.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person and its Restricted
Subsidiaries for such period INCREASED BY (i) an amount equal to any
extraordinary or non-recurring loss, and any net loss realized in connection
with an Asset Sale (together with any related provision for taxes), to the
extent such losses were included in computing such Consolidated Net Income, PLUS
(ii) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision for
taxes was included in computing such Consolidated Net Income, PLUS (iii)
consolidated interest expense of such Person and its Restricted Subsidiaries for
such period, whether paid or accrued (including, without limitation,
amortization of original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letters of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Interest Rate Hedging Agreements), to the
extent that any such expense was included in computing such Consolidated Net
Income, PLUS (iv) depreciation, depletion and amortization expenses (including
amortization of goodwill and other intangibles) for such Person and its
Restricted Subsidiaries for such period to the extent that such depreciation,
depletion and amortization expenses were included in computing such Consolidated
Net Income, PLUS (v) exploration expenses for such Person and its Restricted
Subsidiaries for such period to the extent such exploration expenses were
included in computing such Consolidated Net Income, PLUS (vi) costs incurred in
connection with acquisitions that would be eligible for capitalization treatment
under GAAP, but have been expensed at the time of incurrence, PLUS (vii) other
non-cash charges (excluding any such non-cash charge to the extent that it
represents an accrual of or reserve for cash charges in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of such
Person and its Restricted Subsidiaries for such period, including, without
limitation, any ceiling limitation writedowns and non-cash losses or charges to
net income resulting from the net change in value of such Person's
xxxx-to-market portfolio of Oil and Gas Commodity Price Risk Management
Contracts, to the extent that
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such other non-cash charges were included in computing such Consolidated Net
Income, in each case, on a consolidated basis and determined in accordance
with GAAP. Notwithstanding the foregoing, the provision for taxes on the
income or profits of, and the depreciation, depletion and amortization and
other non-cash charges and expenses of, a Restricted Subsidiary of the
relevant Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in the same proportion) that
the Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person and only if a corresponding amount
would be permitted at the date of determination to be dividended to such
Person by such Restricted Subsidiary without prior governmental approval
(that has not been obtained), and without direct or indirect restriction
pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to that Restricted Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; PROVIDED that (i) the Net Income (but not loss) of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded and (iv) the cumulative effect of a change in accounting principles
shall be excluded, provided, however, that for purposes of a determination
pursuant to the provisions of Section 4.7 hereof, there shall be deducted from
the Net Income of the Company and its Restricted Subsidiaries for such period an
amount equal to payments, distributions and dividends paid by the Company
pursuant to clause (7) of the second paragraph of Section 4.7.
"CONSOLIDATED NET WORTH" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP, as of the end of the
most recent fiscal quarter of the Company ending prior to the taking of any
action for the purpose of which the determination is being made and for which
financial statements are available (but in no event ending more than 135 days
prior to the taking of such action), as (i)
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the par or stated value of all outstanding Capital Stock of the Company, PLUS
(ii) paid-in capital or capital surplus relating to such Capital Stock, PLUS
(iii) any retained earnings or earned surplus, LESS (a) any accumulated
deficit (in each case excluding any minority interest) and (b) any amounts
attributable to Disqualified Stock.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 12.2 hereof or such other address as to which the
Trustee may give notice to the Company.
"CREDIT FACILITIES" means, with respect to the Company, one or more
debt facilities (including, without limitation, the Existing Credit Facility) or
commercial paper facilities with banks or other institutional lenders providing
for revolving credit loans, term loans, production payments, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, increased, supplemented, refunded, replaced or refinanced in whole or
in part from time to time. Indebtedness under Credit Facilities outstanding on
the date on which the Securities are first issued and authenticated under this
Indenture (after giving effect to the use of proceeds thereof) shall be deemed
to have been incurred on such date in reliance on the exception provided by
clause (b) of the definition of Permitted Indebtedness set forth in Section 4.9
hereof.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"DEPOSITARY" means, with respect to the Securities issued in the form
of one or more Global Securities, The Depository Trust Company or another Person
designated as Depositary by the Company, which must be a clearing agency
registered under the Exchange Act.
"DESIGNATED SENIOR DEBT" means (i) the Existing Credit Facility and
(ii) any other Senior Debt permitted under this Indenture which, at the date of
determination, has an aggregate principal amount outstanding of, or under which,
at the date of determination, the holders thereof are committed to lend up to,
at least $10 million and is specifically designated by the Company in the
instrument evidencing or governing such Senior Debt as "Designated Senior Debt"
for purposes of this Indenture.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, is
8
convertible or is exchangeable for Indebtedness or Disqualified Stock or
redeemable at the option of the holder thereof, in whole or in part, in each
case on or prior to the date that is 91 days after (x) the date on which the
Securities mature or (y) the date on which there are no Securities
outstanding.
"DOLLAR-DENOMINATED PRODUCTION PAYMENTS" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE SECURITIES" means, if and when issued in exchange for the
Initial Securities as provided in the Exchange and Registration Rights
Agreement, the Company's 10 1/4% Senior Subordinated Notes due 2008.
"EXISTING CREDIT FACILITY" means that certain Credit Agreement, dated
as of May 14, 1998, among the Company, Bank One, Oklahoma, N.A., as Agent and
lender and the other parties thereto, including any related notes, guarantees,
security or pledge agreements, collateral documents, instruments and agreements
executed by the Company or any Subsidiary of the Company in connection
therewith, and in each case as amended, restated, modified, renewed, increased,
supplemented, refunded, replaced or refinanced, in whole or in part, from time
to time, whether or not with the same or other lenders or agents and whether
provided under the original Existing Credit Facility or any other credit
agreement or indenture.
"FIXED CHARGES" means, with respect to any Person for any period, the
sum, without duplication, of (i) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation, amortization of original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Interest Rate Hedging Agreements); (ii) the consolidated interest expense of
such Person and its Restricted Subsidiaries that was capitalized during such
period; (iii) any interest expense on Indebtedness of another Person that is
guaranteed by such Person or any of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or any of its Restricted Subsidiaries (whether or
not such guarantee or Lien is called upon) and (iv)
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the product of (a) all cash dividend payments (and non-cash dividend payments
in the case of a Person that is a Restricted Subsidiary, unless paid in
Equity Interests that are not Disqualified Stock) on any series of preferred
stock of such Person or any of its Restricted Subsidiaries, times (b) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate
of such Person, expressed as a decimal, in each case, on a consolidated basis
and in accordance with GAAP. When calculating the amount of Fixed Charges,
any interest expense attributable to any Person shall be included in such
calculation to the same extent the Net Income of such Person was included in
the calculation of Consolidated Net Income in connection with calculating the
Fixed Charge Coverage Ratio.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Restricted Subsidiaries incurs, assumes, guarantees or
redeems any Indebtedness (other than revolving credit borrowings) or issues or
redeems preferred stock subsequent to the commencement of the period for which
the Fixed Charge Coverage Ratio is being calculated but prior to the date on
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, guarantee or redemption
of Indebtedness, or such issuance or redemption of preferred stock, as if the
same had occurred at the beginning of the applicable four-quarter reference
period. In addition, for purposes of making the computation referred to above,
(i) acquisitions that have been made by the referent Person or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the four-quarter reference
period or subsequent to such reference period and on or prior to the Calculation
Date (including, without limitation, any acquisition to occur on the Calculation
Date) shall be deemed to have occurred on the first day of the four-quarter
reference period and any cost savings or expense reductions attributable at the
time of such computation or to be attributable in the future to such
acquisition, shall be included in such computation, to the extent that such
adjustments would be permitted under Article 11 of Regulation S-X and
Consolidated Cash Flow for such reference period shall be calculated without
giving effect to clause (iii) of the proviso set forth in the definition of
Consolidated Net Income, (ii) the net proceeds of Indebtedness incurred or
Disqualified Stock issued by the referent Person pursuant to the first paragraph
of Section 4.9 hereof during the four-quarter reference period or subsequent to
such reference period and on or prior to the Calculation Date shall be deemed to
have been received by the referent Person or any of its Restricted Subsidiaries
on the first day of the four-quarter reference period and applied to its
intended use on such date, (iii) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of
10
prior to the Calculation Date, shall be excluded and (iv) the Fixed Charges
attributable to discontinued operations, as determined in accordance with
GAAP, and operations or businesses disposed of prior to the Calculation Date,
shall be excluded, but only to the extent that the obligations giving rise to
such Fixed Charges shall not be obligations of the referent Person or any of
its Restricted Subsidiaries following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession which are in effect on the date hereof.
"GOVERNMENT SECURITIES" means securities that are (a) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such Government
Security or a specific payment of principal of or interest on any such
Government Security held by such custodian for the account of the holder of such
depository receipt; PROVIDED, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Security or the specific payment of principal of or interest on
the Government Security evidenced by such depository receipt.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"HOLDER" means a Person in whose name a Security is registered on the
Registrar's books.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(a) any indebtedness of such Person, whether or not contingent, (i) in respect
of borrowed money, (ii) evidenced by bonds, notes, debentures or similar
instruments, (iii) evidenced by letters of credit (or reimbursement agreements
in respect thereof) or banker's acceptances, (iv) representing Capital Lease
Obligations, (v) representing the balance deferred and unpaid of the purchase
price of any property, except any such
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balance that constitutes an accrued expense or trade payable, (vi)
representing any obligations in respect of Interest Rate Hedging Agreements
or Oil and Gas Hedging Contracts, and (vii) in respect of any Production
Payment, (b) all indebtedness of others secured by a Lien on any asset of
such Person (whether or not such indebtedness is assumed by such Person),
(c) obligations of such Person in respect of production imbalances,
(d) Acquired Debt of such Person, (e) Attributable Debt of such Person, and
(f) to the extent not otherwise included in the foregoing, the guarantee by
such Person of any Indebtedness of any other Person.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as
described above and the maximum liability, on the occurrence of the
contingency giving rise to the obligation, of any contingent obligations
described above. The amount of indebtedness at any date in respect of
(i) Credit Facilities shall be the outstanding principal amount thereof at
such date plus any outstanding letters of credit (or reimbursement
obligations in respect thereof) issued thereunder at such date and
(ii) Interest Rate Hedging Agreements or Oil and Gas Hedging Contracts at
such date shall be an amount equal to the net termination value of such
agreement or arrangement giving rise to such obligation that would be payable
at such time.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time.
"INITIAL PURCHASER" means Chase Securities Inc. as initial
purchaser of the Notes.
"INSTITUTIONAL ACCREDITED INVESTORS" means an institutional
"accredited investor" within the meaning of Rules 501(a)(1), (2), (3) or (7)
under the Securities Act.
"INTEREST RATE HEDGING AGREEMENTS" means, with respect to any
Person, the obligations of such Person under (i) interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements
and (ii) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.
"INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations,
but excluding trade credit and other ordinary course advances customarily
made in the Oil and Gas Business) advances (excluding commission, travel and
similar advances to officers and employees made in the ordinary course of
business), capital contributions, purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP; PROVIDED that the following shall not
constitute Investments: (i) an acquisition of assets, Equity
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Interests or other securities by the Company for consideration consisting of
common equity securities of the Company, (ii) Interest Rate Hedging
Agreements entered into in compliance with the covenant set forth in clause (g)
of the second paragraph of Section 4.9, (iii) Oil and Gas Hedging Agreements
entered into in compliance with the covenant set forth in clause (h) of the
second paragraph of Section 4.9, (iv) endorsements of negotiable instruments
and documents in the ordinary course of business, (v) extensions of trade
credit on commercially reasonable terms in accordance with normal trade
practices, and (vi) Cash Equivalents, bonds, notes, debentures or other
securities received in accordance with the limitations set forth in Section
4.10. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary of the Company such that, after giving effect to any
such sale or disposition, such entity is no longer a Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date
of any such sale or disposition equal to the fair market value of the Equity
Interests of such Subsidiary not sold or disposed of.
"ISSUE DATE" means the date on which the Initial Securities are
originally issued.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in The City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
"LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give
any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"MOODY'S" means Xxxxx'x Investors Service, Inc. and its successors.
"NET INCOME" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain or loss, together with any related provision for taxes on such gain or
loss, realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or
(b) the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any
of its
13
Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain or
loss, together with any related provision for taxes on such extraordinary or
nonrecurring gain or loss.
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale, but
excluding cash amounts placed in escrow, until such amounts are released to
the Company), net of the direct costs relating to such Asset Sale (including,
without limitation, legal, accounting, investment banking and other
professional fees and expenses, and sales commissions) and any relocation
expenses incurred as a result thereof, taxes paid or payable as a result
thereof (after taking into account any available tax credits or deductions
and any tax sharing arrangements), amounts required to be applied to the
repayment of Indebtedness (other than Indebtedness under any Senior Debt)
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such
asset or assets established in accordance with GAAP and any reserve
established for future liabilities.
"NON-RECOURSE DEBT" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides any guarantee or
credit support of any kind (including any undertaking, guarantee, indemnity
or agreement or instrument that would constitute Indebtedness) or (b) is
directly or indirectly liable (as a guarantor or otherwise); (ii) no default
with respect to which (including any rights that the holders thereof may have
to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time, or both) any holder of any other Indebtedness of
the Company or any of its Restricted Subsidiaries to declare a default on
such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity; and (iii) the explicit terms of which
provide that there is no recourse against any of the assets of the Company or
its Restricted Subsidiaries.
"NOTE CUSTODIAN" means the Trustee or the Registrar, as custodian
with respect to the Securities in global form, or any successor entity
thereto or any entity acting as custodian with respect to Securities in
global form.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFERING" means the offering of the Securities by the Company.
"OFFICER" means, with respect to any Person, the
14
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, the Controller, the Secretary, the Assistant Secretary or any
Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company, by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.5 hereof.
"OIL AND GAS BUSINESS" means (i) the acquisition, exploration,
exploitation, development, operation and disposition of interests in oil, gas
and other hydrocarbon properties, (ii) the gathering, marketing,
distribution, treating, processing, storage, selling and transporting of any
production from such interests or properties of the Company and its
subsidiaries and the marketing of oil and gas obtained from unrelated
Persons, (iii) any business relating to exploration for or development,
production, treatment, processing, storage, transportation, gathering or
marketing of oil, gas and other minerals and products produced in association
therewith, (iv) any business relating to oilfield sales and service and (v) any
activity that is ancillary to or necessary or appropriate for the activities
described in clauses (i) through (iv) of this definition.
"OIL AND GAS HEDGING CONTRACTS" means any oil and gas purchase or
commodity price risk management hedging agreement, and other agreement or
arrangement, entered into in the ordinary course of business, in each case,
that is designed to provide protection against oil and gas price fluctuations.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of
Section 12.5 hereof. The counsel may be an employee of or counsel to the
Company, any Subsidiary Guarantor or the Trustee.
"PARI PASSU INDEBTEDNESS" means indebtedness which ranks PARI PASSU
in right of payment to the Securities.
"PERMITTED HOLDERS" means (i) any stockholder of the Company on the
Issue Date; (ii) family members or relatives of the persons described in
clause (i); (iii) any trusts created for the benefit of the persons described
in clauses (i) or (ii); (iv) in the event of the incompetence or death of any
of the persons described in clauses (i) or (ii), such person's estate,
executor, administrator, committee or other personal representatives or
beneficiaries; and (v) any Permitted Holder Subsidiary.
"PERMITTED HOLDER SUBSIDIARY" means, with respect to any Permitted
Holder, (i) any corporation more than 50% of the
15
outstanding voting stock of which is owned, directly or indirectly, by one or
more Permitted Holders, or by one or more other Permitted Holder Subsidiaries
of such Permitted Holders,or by one or more Permitted Holders and one or more
other Permitted Holder Subsidiaries of such Permitted Holders, (ii) any
general partnership, limited liability company, joint venture or similar
entity more than 50% of the outstanding partnership, membership or similar
interest of which is owned directly or indirectly, by one or more Permitted
Holders, or by one or more other Permitted Holder Subsidiaries of such
Permitted Holders, or by one or more Permitted Holders and one or more other
Permitted Holder Subsidiaries of such Permitted Holders and (iii) any limited
partnership of which one or more Permitted Holders or any Permitted Holder
Subsidiary of such Permitted Holders is a general partner.
"PERMITTED INDEBTEDNESS" has the meaning given in the covenant
described in Section 4.9.
"PERMITTED INVESTMENTS" means (a) any Investment in the Company or
in a Restricted Subsidiary of the Company; (b) any Investment in Cash
Equivalents; (c) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person if, as a result of such Investment and any related
transactions that at the time of such Investment are contractually mandated
to occur, (i) such Person becomes a Restricted Subsidiary of the Company or
(ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys all or substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the Company; (d) any
Investment made as a result of the receipt of non-cash portion of the Cash
Consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.10 hereof or not constituting an Asset Sale by reason of the
$5 million threshold contained in the definition thereof; (e) any Investment
by the Company in any Person engaged in the Oil and Gas Business or assets
used in the Oil and Gas Business in exchange for Equity Interests in the
Company (other than Disqualified Stock); (f) shares of Capital Stock received
in connection with any good faith settlement of a bankruptcy proceeding
involving a trade creditor; (g) Interest Rate Hedging Agreements or Oil and
Gas Hedging Contracts; (h) loans and advances to employees in the ordinary
course of business for bona fide business purposes; (i) operating agreements,
joint ventures, partnership agreements, working interests, royalty interests,
mineral leases, processing agreements, farm-out or farm-in agreements,
contracts for the sale, transportation or exchange of oil and natural gas,
unitization agreements, pooling arrangements, area of mutual interest
agreements, production sharing agreements or other similar or customary
agreements, transactions, properties, interests or arrangements, and
Investments and expenditures in connection therewith or pursuant thereto, in
each case made or entered into in the ordinary course of the Oil and Gas
Business, excluding however, Investments in corporations other than any
Investment received pursuant to the provisions set forth in Section 4.10; and
(j) any other Investments in any Person or Persons not otherwise permitted to
16
be made pursuant to clauses (a)-(i) above, when taken together with all other
Investments made pursuant to this clause (j) that are at the time
outstanding, having an aggregate amount (such amount to be calculated on a
cost basis) not to exceed the greater of (i) $15 million and (ii) 5% of Total
Assets, as calculated at the time of such Investment.
"PERMITTED LIENS" means (i) Liens securing Indebtedness of a
Subsidiary or Liens securing Senior Debt that is outstanding on the date of
issuance of the Securities and Liens securing Senior Debt that is permitted
by the terms of this Indenture to be incurred; (ii) Liens in favor of the
Company or any Restricted Subsidiary; (iii) Liens on property existing at the
time of acquisition thereof by the Company or any Subsidiary of the Company
and Liens on property or assets of a Subsidiary existing at the time it
became a Subsidiary, PROVIDED that such Lien was not created in contemplation
of the acquisition of the property and provided further that no such Lien
shall extend to any assets other than the acquired property or the property
of the acquired Subsidiary; (iv) Liens incurred on deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance or other kinds of social security, or to secure the
payment or performance of tenders, statutory or regulatory obligations,
surety or appeal bonds, performance bonds or other obligations of a like
nature incurred in the ordinary course of business (including lessee or
operator obligations under statutes, governmental regulations or instruments
related to the ownership, exploration and production of oil, gas and minerals
on state or federal lands or waters); (v) Liens existing on the date of this
Indenture; (vi) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently concluded,
PROVIDED that any reserve or other appropriate provision as shall be required
in conformity with GAAP shall have been made therefor; (vii) statutory liens
of landlords, mechanics, suppliers, vendors, warehousemen, carriers or other
like Liens arising in the ordinary course of business; (viii) judgment Liens
not giving rise to an Event of Default so long as any appropriate legal
proceeding that may have been duly initiated for the review of such judgment
shall not have been finally terminated or the period within which such
proceeding may be initiated shall not have expired; (ix) Liens on, or related
to, properties or assets to secure all or part of the costs incurred in the
ordinary course of the Oil and Gas Business for the exploration,
exploitation, drilling, development, production, gathering, processing,
transportation, marketing, storage or operation thereof; (x) Liens on
pipeline or pipeline facilities that arise under operation of law; (xi) Liens
arising under operating agreements, joint venture agreements, partnership
agreements, oil and gas leases, farm-out or farm-in agreements, division
orders, contracts for the sale, transportation or exchange of oil or natural
gas, unitization and pooling declarations and agreements, area of mutual
interest agreements and other agreements that are customary in the Oil and
Gas Business; (xii) Liens reserved in
17
oil and gas mineral leases for bonus or rental payments and for compliance
with the terms of such leases, (xiii) Liens securing the Securities,
(xiv) Liens constituting survey exceptions, encumbrances, easements, and
reservations of, and rights to others for, rights-of-way, zoning and other
restrictions as to the use of real properties, and minor defects of title
which, in the case of any of the foregoing, do not secure the payment of
borrowed money, and in the aggregate do not materially adversely affect the
value of the assets of the Company and its Restricted Subsidiaries, taken as
a whole, or materially impair the use of such properties for the purposes for
which such properties are held by the Company or such Subsidiaries, (xv) any
interest or title of a lessor under any Capital Lease Obligation or operating
lease, (xvi) Liens resulting from the deposit of funds or evidences of
Indebtedness in trust for the purpose of defeasing Indebtedness of the
Company or any of the Restricted Subsidiaries, (xvii) Liens securing
obligations under Interest Rate Hedging Agreements or Oil and Gas Commodity
Price Risk Management Contracts, (xviii) Liens upon specific items of
inventory or other goods and proceeds of the Company or any Restricted
Subsidiary securing the Company's or such Restricted Subsidiary's, as the
case may be, obligations in respect of bankers' acceptances issued or created
for the account of the Company or such Restricted Subsidiary, as the case may
be, to facilitate the purchase, shipment or storage of such inventory or
other goods, (xix) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof,
(xx) Liens encumbering property or assets under construction arising from
progress or partial payments by a customer of the Company or its Restricted
Subsidiaries relating to such property or assets, (xxi) Liens encumbering
deposits made to secure Obligations arising from statutory, regulatory,
contractual or warranty requirements of the Company or any of its Restricted
Subsidiaries, including rights of offset and set-off, (xxii) Liens securing
Purchase Money Debt; provided however that the related Purchase Money Debt
shall not be secure by any property or assets of the Company or any
Restricted Subsidiary other than the property and assets acquired by the
Company with the proceeds of such Purchase Money Debt, (xxiii) Liens on the
Capital Stock of Unrestricted Subsidiaries, (xxiv) Liens to secure any
Permitted Refinancing Debt, provided that the Indebtedness so exchanged,
extended, refinanced, renewed, replaced, defeased or refunded was secured by
Liens permitted pursuant to clause (iii) or (iv) of this definition, provided
however, that (a) such new Liens shall be limited to all or part of the same
property that secured the original Lien, plus improvements on the property
and (b) the Permitted Refinancing Debt secured by such Lien at such time is
not increased to any amount greater than the sum of (x) the outstanding
principal amount or, if greater, the committed amount of the Indebtedness
secured by Liens described under clause (iii) or (iv) of this definition at
the time the original Lien became a Lien permitted in accordance with this
Indenture and (y) an amount necessary to pay any fees and expenses, including
premiums, related to such exchange, extension, refinancing,
18
renewal, replacement, defeasement or refunding, (xxv) Liens securing
Attributable Indebtedness under any sale and leaseback transaction permitted
by the terms of this Indenture, but only on the property subject to such sale
and leaseback transaction; and (xxvi) Liens not otherwise permitted by
clauses (i) through (xxv) that are incurred in the ordinary course of
business of the Company or any Subsidiary with respect to obligations that do
not exceed $5 million at any one time outstanding.
"PERMITTED REFINANCING DEBT" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness (other than Indebtedness incurred under a Credit
Facility) of the Company or any of its Restricted Subsidiaries; PROVIDED
that: (i) the principal amount of such Permitted Refinancing Debt does not
exceed the principal amount of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable
expenses incurred in connection therewith (other than increases resulting
from the capitalization of interest or fees)); (ii) such Permitted
Refinancing Debt has a final maturity date on or later than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Securities or the
Subsidiary Guarantees, as the case may be, such Permitted Refinancing Debt
has a final maturity date later than the final maturity date of, and is
subordinated in right of payment to, the Securities or the Subsidiary
Guarantees, as the case may be, on terms at least as favorable taken as a
whole to the Holders of the Securities as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (iv) such Indebtedness is incurred either
by the Company or by the Restricted Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or
any other entity.
"PRIVATE EXCHANGE SECURITIES" shall have the meaning set forth in
the Registration Rights Agreement.
"PRODUCTION PAYMENTS" means Dollar-Denominated Production Payments
and Volumetric Production Payments, collectively.
"PURCHASE AGREEMENT" means the Purchase Agreement, dated July 21,
1998, between the Company and the Initial Purchaser relating to the Offering.
19
"PURCHASE MONEY DEBT" means Indebtedness incurred in connection
with the purchase by the Company or any of its Subsidiaries of any equipment,
real or personal property, or any other asset, other than Equity Interests of
any Person (i) as to which the obligee expressly waives the provisions of
Section 1111 (b) of Xxxxx 00, Xxxxxx Xxxxxx Code; (ii) as to which neither
the Company nor any of its Restricted Subsidiaries (a) provides any guarantee
or credit support of any kind (including any undertaking, guarantee,
indemnity, agreement or instrument that would constitute Indebtedness), or
(b) is directly or indirectly liable (as guarantor or otherwise) other than
the pledge of the equipment, real or personal property or other assets
acquired with the proceeds of such Indebtedness; (iii) no default with
respect to which (including any rights that the holders thereof may have to
take enforcement actions against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time, or both) any holder of any other Indebtedness of
the Company or any of its Restricted Subsidiaries to declare a default on
such other indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity; and (iv) the explicit terms of which
provide that there is no recourse against any of the assets of the Company or
its Restricted Subsidiaries, other than recourse against the equipment, real
or personal property or other assets acquired with the proceeds of such
Indebtedness.
"QIB" means any "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act").
"REGISTERED EXCHANGE OFFER" means the offer to exchange the Initial
Securities for the Exchange Securities issued under a registration statement
filed pursuant to the terms of the Registration Rights Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Exchange and Registration
Rights Agreement, dated July 24, 1998, among the Company and the Initial
Purchaser.
"RESPONSIBLE OFFICER" when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED PERIOD" means 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.
20
"RESTRICTED SECURITIES LEGEND" means the Private Placement Legend
set forth in clause (A) of Section 2.1(c) or the Regulation S Legend set
forth in clause (B) of Section 2.1(c), as applicable.
"RESTRICTED SUBSIDIARY" means any direct or indirect Subsidiary of
the Company that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Group and its successors.
"SECURITIES" means the securities issued under this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHELF REGISTRATION STATEMENT" has the meaning ascribed to such
term in the Registration Rights Agreement.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of the Company
or any Restricted Subsidiary (whether outstanding on the Issue Date or
thereafter incurred) which is subordinate or junior in right of payment to
the Securities pursuant to a written agreement.
"SUBSIDIARY" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more Subsidiaries of such Person (or any combination
thereof).
"SUBSIDIARY GUARANTEE" means any Guarantee of payment of the
Securities by a Subsidiary Guarantor pursuant to the terms of this Indenture,
and, collectively, all such Guarantees. Each such Subsidiary Guarantee by
any Restricted Subsidiary acquired or created by the Company or any of its
Restricted Subsidiaries after the date of this Indenture shall be in
substantially the form set forth in Exhibit C to this Indenture or in such
other form as shall be acceptable to the Trustee.
"SUBSIDIARY GUARANTORS" means each Restricted Subsidiary of the
Company existing on the date of this Indenture (such Subsidiaries being
Continental Gas, Inc. and Continental Crude Co.), and any future Restricted
Subsidiary of the Company that incurs a Subsidiary Guarantee in accordance
with the provisions of this Indenture, and, in each case, their respective
21
successors and assigns.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"TOTAL ASSETS" means, with respect to any Person, the total
consolidated assets of such Person and its Restricted Subsidiaries, as shown on
the most recent balance sheet of such Person.
"TREASURY RATE" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two Business Days prior to the redemption
date (or, if such Statistical Release is no longer published, any publicly
available source or similar market data)) most nearly equal to the period from
the redemption date to August 1, 2003; PROVIDED that if the period from the
redemption date to August 1, 2003 is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the period
from the redemption date to August 1, 2003 is less than one year, the weekly
average yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used.
"TRUSTEE" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of the Company
which at the time of determination shall be an Unrestricted Subsidiary (as
designated by the Board of Directors of the Company, as provided below) and (ii)
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 does not own any Capital Stock of, 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 Indebtedness of such Subsidiary shall at the date of
designation, and will at all times thereafter consist of, Non-Recourse Debt; (c)
the Company certifies that such designation was permitted by Section 4.7;
(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
22
Company and its Subsidiaries; (e) such Subsidiary does not, directly or
indirectly, own any Indebtedness of or Equity Interest in, and has no
Investments in, the Company or any Restricted Subsidiary; (f) such Subsidiary
is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation to maintain or
preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; and (g) 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 or such Restricted Subsidiary 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 Officer's Certificate
certifying that such designation complied 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
Indebtedness of 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 (1) 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 Indebtedness (excluding
Permitted Indebtedness) pursuant to Section 4.9 on a pro forma basis taking
into account such designation and (2) such Subsidiary executes a Subsidiary
Guarantee pursuant to Section 11.4 of this Indenture.
"VOLUMETRIC PRODUCTION PAYMENTS" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"VOTING STOCK" of an entity means all classes of Capital Stock of such
entity then outstanding and normally entitled to vote in the election of
directors or all interests in such entity with the ability to control the
management or actions of such entity.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such
23
Indebtedness.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned, directly or indirectly, by such Person or by one or more
Wholly Owned Restricted Subsidiaries of such Person.
Section 1.2. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction" . . . . . . . . . . . . . . . . . . 4.11
"Asset Sale Offer". . . . . . . . . . . . . . . . . . . . . 3.9
"Bankruptcy Law". . . . . . . . . . . . . . . . . . . . . . 10.2
"Cash Consideration". . . . . . . . . . . . . . . . . . . . 4.10
"Change of Control Offer" . . . . . . . . . . . . . . . . . 4.13
"Change of Control Payment" . . . . . . . . . . . . . . . . 4.13
"Change of Control Payment Date". . . . . . . . . . . . . . 4.13
"Change of Control Redemption Payment". . . . . . . . . . . 3.7
"Common Stock". . . . . . . . . . . . . . . . . . . . . . . 3.7
"Covenant Defeasance" . . . . . . . . . . . . . . . . . . . 8.3
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . 6.1
"DTC" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Definitive Securities" . . . . . . . . . . . . . . . . . . 2.1
"Event of Default". . . . . . . . . . . . . . . . . . . . . 6.1
"Excess Proceeds" . . . . . . . . . . . . . . . . . . . . . 4.10
"Exchange Global Note". . . . . . . . . . . . . . . . . . . 2.1
"Global Securities" . . . . . . . . . . . . . . . . . . . . 2.1
"Guarantor Senior Debt. . . . . . . . . . . . . . . . . . . 10.2
"incur" . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9
"Institutional Accredited Investor
Global Note" . . . . . . . . . . . . . . . . . . . . . . 2.1
"Institutional Accredited Investor Note". . . . . . . . . . 2.1
"Legal Defeasance". . . . . . . . . . . . . . . . . . . . . 8.2
"Notice of Default" . . . . . . . . . . . . . . . . . . . . 6.1
"Offer Amount". . . . . . . . . . . . . . . . . . . . . . . 3.9
"Offer Period". . . . . . . . . . . . . . . . . . . . . . . 3.9
"Paying Agent". . . . . . . . . . . . . . . . . . . . . . . 2.3
"Payment Blockage Notice" . . . . . . . . . . . . . . . . . 10.4
"Payment Default" . . . . . . . . . . . . . . . . . . . . . 6.1
"Permitted Indebtedness". . . . . . . . . . . . . . . . . . 4.9
"Private Placement Legend". . . . . . . . . . . . . . . . . 2.1
"Purchase Date" . . . . . . . . . . . . . . . . . . . . . . 3.9
"Register". . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Regulation S". . . . . . . . . . . . . . . . . . . . . . . 2.1
"Regulation S Certificate". . . . . . . . . . . . . . . . . 2.1
"Regulation S Global Note". . . . . . . . . . . . . . . . . 2.1
"Regulation S Legend" . . . . . . . . . . . . . . . . . . . 2.1
"Regulation S Note" . . . . . . . . . . . . . . . . . . . . 2.1
"Regulation S Permanent Global Note". . . . . . . . . . . . 2.1
"Regulation S Temporary Global Note". . . . . . . . . . . . 2.1
"Release Date". . . . . . . . . . . . . . . . . . . . . . . 2.1
24
"Resale Restriction Termination Date" . . . . . . . . . . . 2.3
"Representative". . . . . . . . . . . . . . . . . . . . . . 10.2
"Restricted Payments" . . . . . . . . . . . . . . . . . . . 4.7
"Rule 144A" . . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Rule 144A Global Note" . . . . . . . . . . . . . . . . . . 2.1
"Rule 144A Note". . . . . . . . . . . . . . . . . . . . . . 2.1
"Senior Debt" . . . . . . . . . . . . . . . . . . . . . . . 10.2
"Subsequent Series Securities". . . . . . . . . . . . . . . 2.2
Section 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Securities;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
"OBLIGOR" with respect to the Securities means the Company and with
respect to the Subsidiary Guarantees means the Subsidiary Guarantors and any
successor obligor upon the Securities and the Subsidiary Guarantees,
respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by rule enacted by the
Commission under the TIA have the meanings so assigned to them.
Section 1.4. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "OR" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the Commission from time to time.
25
26
ARTICLE 2
THE SECURITIES
Section 2.1. FORM, DATING AND TERMS.
(a) The Initial Securities are being offered and sold by the Company
pursuant to the Purchase Agreement.
Initial Securities offered and sold to the qualified institutional
buyers (as defined in Rule 144A under the Securities Act ("RULE 144A")) 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 substantially in the form of Exhibit
A, which is hereby incorporated by reference and made a part of this Indenture,
together with appropriate legends as set forth in Section 2.1(c) (the "RULE
144A GLOBAL NOTE"), deposited with the Trustee, as custodian for the Depositary,
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 the Depositary'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
the Depositary or its nominee, as hereinafter provided.
27
Initial Securities offered and sold outside the United States of
America ("Regulation S Note") in reliance on Regulation S will be issued on the
Issue Date in the form of a temporary global Security, without interest coupons,
substantially in the form set forth in Exhibit A, which is hereby incorporated
by reference and made a part of this Indenture, together with appropriate
legends as set forth in Section 2.1(c) (a "REGULATION S TEMPORARY GLOBAL NOTE").
Beneficial interests in a Regulation S Temporary Global Note will be
exchangeable for beneficial interests in a single permanent global Security (the
"REGULATION S PERMANENT GLOBAL NOTE", together with the Regulation S Temporary
Global Note, the "REGULATION S GLOBAL NOTE") on or after the expiration of the
Restricted Period (the "RELEASE DATE") upon the receipt by the Trustee or its
agent of a certificate certifying that the Holder of the beneficial interest in
the Regulation S Temporary Global Note is a non-United States Person within the
meaning of Regulation S (a "REGULATION S CERTIFICATE"), substantially in the
form set forth in Section 2.14. Upon receipt by the Trustee or Paying Agent of
a Regulation S Certificate, (i) with respect to the first such Regulation S
Certificate, the Company shall execute and upon receipt of a written order of
the Company signed by two officers for authentication, the Trustee shall
authenticate and deliver to the Note Custodian, the Regulation S Permanent
Global Note and (ii) with respect to the first and all subsequent Regulation S
Certificates, the Note Custodian shall exchange on behalf of the applicable
beneficial owners the portion of the Regulation S Temporary Global Note covered
by such Regulation S Certificates for a comparable portion of the Regulation S
Permanent Global Note. Upon any exchange of a portion of a Regulations S
Temporary Global Note for a comparable portion of a Regulation S Permanent
Global Note, the Note Custodian shall endorse on the schedules affixed to each
of such Regulation S Global Note (or on continuations of such schedules affixed
to each of such Regulation S Global Note and made parts thereof) appropriate
notations evidencing the date of transfer and (x) with respect to the Regulation
S Temporary Global Note, a decrease in the principal amount thereof equal to the
amount covered by the applicable certification and (y) with respect to the
Regulation S Permanent Global Note, an increase in the principal amount thereof
equal to the principal amount of the decrease in the Regulation S Temporary
Global Note pursuant to clause (x) above. The Regulation S Global Note will be
deposited with the Note Custodian for the Depositary, 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 the Depositary'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 ade on the records of the Note Custodian for the Depositary or its
nominee, as hereinafter provided.
Initial Securities resold to institutional "accredited investors" (as
defined in Rules 501(a)(1), (2), (3) and (7) under
28
the Securities Act) in the United States of America (the "INSTITUTIONAL
ACCREDITED INVESTOR NOTE") will be issued in the form of a permanent global
Security substantially in the form of Exhibit A, which is hereby incorporated
by reference and made a part of this Indenture, together with appropriate
legends as set forth in Section 2.1(c) (the "INSTITUTIONAL ACCREDITED
INVESTOR GLOBAL NOTE") deposited with the Note Custodian, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
Institutional Accredited Investor Global Note may be represented by more than
one certificate, if so required by the Depositary's rules regarding the
maximum principal amount to be represented by a single certificate. The
aggregate principal amount of the Institutional Accredited Investor Global
Note may from time to time be increased or decreased by adjustments made on
the records of the Note Custodian for the Depositary or its nominee, as
hereinafter provided.
Exchange Securities exchanged for interests in the Rule 144A Note, the
Regulation S Note and the Institutional Accredited Investor 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, with 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 the
Depositary's rules regarding the maximum principal amount to be represented by a
single certificate.
The Rule 144A Global Note, the Regulation S Global Note, the Exchange
Global Note and the Institutional Accredited Investor 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 Register or (ii) wire transfer to an account
located in the United States maintained by the payee.
The Private Exchange Securities shall be in the form of Exhibit A.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule or usage, in addition to those set forth on Exhibits A and B
and in Section 2.1(c). The Company and the Trustee shall approve the forms of
the Securities and any notation, endorsement or legend on them. Each Security
shall be dated the date of its authentication. The terms of the Securities set
forth in Exhibit A and Exhibit B are part of the terms of this Indenture and, to
the extent applicable, the Company and the Trustee, by their execution and
29
delivery of this Indenture, expressly agree to be bound by such terms.
(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 or (ii) an Initial Security is
exchanged for an Exchange Security in connection with an effective registration
statement, in each case pursuant to the Registration Rights Agreement, (A) such
Rule 144A Global Note and the Institutional 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 OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH 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
UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL 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 $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, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) AND (F)
30
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
(B) 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 "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") WHICH 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 "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3)
OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL 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, 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 EXMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, 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
31
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."
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.
THIS SECURITY IS SUBORDINATED TO SENIOR DEBT, AS DEFINED IN THE
INDENTURE (AS DEFINED HEREIN), AND THE OBLIGATIONS OF EACH SUBSIDIARY
GUARANTOR UNDER THE SUBSIDIARY GUARANTEE CONTAINED IN THE INDENTURE
ARE SUBORDINATED TO GUARANTOR SENIOR INDEBTEDNESS, AS DEFINED IN THE
INDENTURE, OF SUCH SUBSIDIARY GUARANTOR."
The Regulation S Temporary Global Note shall also bear the following
legend on the face thereof:
"THIS GLOBAL NOTE IS A TEMPORARY GLOBAL NOTE FOR PURPOSES OF
REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"). NEITHER THIS TEMPORARY GLOBAL NOTE NOR ANY
INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS PERMITTED
UNDER THE INDENTURE REFERRED TO BELOW.
NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE
REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF
THE INDENTURE."
(d) BOOK-ENTRY PROVISIONS. (i) This Section 2.1(d) shall apply only
to Global Securities deposited with the Trustee, as Note Custodian for the
Depositary.
32
(ii) Each Global Security initially shall (x) be registered in the
name of the Depositary for such Global Security or the nominee of the
Depositary, (y) be delivered to the Note Custodian and (z) bear legends as set
forth in Section 2.1(c).
(iii) Members of, or participants in, the Depositary ("AGENT
MEMBERS") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary or by the Note Custodian or
under such Global Security, and the Depositary may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and its Agent Members, the operation of customary practices of
the Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
(iv) In connection with any transfer of a portion of the beneficial
interest in a Global Security pursuant to subsection (e) of this Section to
beneficial owners who are required to hold Definitive Securities, the Trustee
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.
(v) 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 the Depositary in exchange for its
beneficial interest in such Global Security, an equal aggregate principal amount
of Definitive Securities of authorized denominations.
(e) DEFINITIVE SECURITIES. Except as provided below, owners of
beneficial interests in Global Securities will not be entitled to receive
certificated Securities ("DEFINITIVE SECURITIES"). If required to do so
pursuant to any applicable law or regulation, beneficial owners may obtain
Definitive Securities in exchange for their beneficial interests in a Global
Security upon written request in accordance with the Depositary'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 (i) the Depositary notifies the Company in writing that it is
unwilling or unable to continue as depositary for such Global Security or the
Depositary ceases to be a clearing agency
33
registered under the Exchange Act, at a time when the Depositary 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, (ii) the Company executes and delivers to the Trustee and
Registrar an Officers' Certificate stating that such Global Security shall be
so exchangeable or (iii) an Event of Default has occurred and is continuing
and the Registrar has received a request from the Depositary to do so.
(f) Any Definitive Security delivered in exchange for an interest in
a Global Security pursuant to Section 2.1(d)(iv) or (v) 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).
(g) 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.
Section 2.2. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities
and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time a Security is authenticated, the Security shall nevertheless
be valid.
A Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate and make available for delivery (1)
Initial Securities for original issue in an aggregate principal amount of $150.0
million, and (2) Exchange Securities for issue only in a Registered Exchange
Offer, pursuant to the Registration Rights Agreement, in exchange for Initial
Securities of an equal principal amount, and (3) additional series of notes
which may be offered subsequent to the Issue Date (the "SUBSEQUENT SERIES
SECURITIES") in an aggregate principal amount not to exceed $150,000,000, in
each case upon a written order of the Company signed by two Officers. Such
order shall specify the amount of the Securities to be authenticated, 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 or Subsequent
Series Securities. The aggregate principal amount of notes which may be
authenticated and delivered under this Indenture is limited to $300.0 million
outstanding except as provided in Section 2.7. No Subsequent Series Securities
may be authenticated and
34
delivered in an aggregate principal amount of less than $25,000,000. All
Securities issued on the Issue Date and all Subsequent Series Securities
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 notes issued under
this Indenture shall vote and consent together on all matters as one class
and no series of notes will have the right to vote or consent as a separate
class on any matter.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
Section 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York where (i) Securities may be presented for
registration of transfer or for exchange ("REGISTRAR") and (ii) Securities may
be presented for payment ("PAYING AGENT"). The Registrar shall keep a register
of the Securities and of their transfer and exchange (the "Register"). The
Company may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company 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 in writing of the name and
address of any Agent not a party to this Indenture. If the Company fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such. The Company or any of its Subsidiaries may act as Paying
Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Securities.
35
Section 2.4. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent, including the Trustee
(who shall be deemed to have agreed by its execution of this Indenture), to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee (unless the Paying Agent is the Trustee, in which case it
shall hold in trust for the Holders) all money held by the Paying Agent for the
payment of principal, premium, if any, or interest, on the Securities, and shall
notify the Trustee of any default by the Company or any Subsidiary Guarantor in
making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or a Subsidiary) shall have no further liability for the money. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company or a Subsidiary, the Trustee shall serve as sole Paying Agent for the
Securities.
Section 2.5. HOLDER 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
all Holders. If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least seven Business Days before each interest payment date and
at such other times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Securities, which list may be conclusively relied
upon by the Trustee.
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 Institutional Accredited Investor Note prior
to the date which 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"):
(1) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a QIB shall be
made upon the representation of the transferee 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
36
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 Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to an
institutional accredited investor shall be made upon receipt by the Trustee
or its agent of a certificate substantially in the form set forth in
Section 2.13 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 Institutional
Accredited Investor 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 2.14 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 institutional accredited investor shall be made upon receipt
by the Trustee or its agent of a certificate substantially in the form set
forth in Section 2.13 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
37
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 2.14 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 2.14 or any additional certification.
(c) RESTRICTED SECURITIES LEGEND. 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, in the case of a Regulation S Note,
such transfer, exchange or replacement occurs after the Restricted Period or
there is delivered to the Registrar an Opinion of Counsel to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(d) The Company shall deliver to the Trustee an Officers' Certificate
setting forth the Resale Restriction Termination Date.
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 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 4.10, 4.13 or 9.5 or pursuant to
paragraph 5 of the Securities).
38
(3) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (A) any Definitive Security
selected for redemption in whole or in part pursuant to Article III, except
the unredeemed portion of any Definitive Security being redeemed in part or
(B) any Security for a period beginning (1) 15 Business 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
Business 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. (1) The Trustee shall have no
responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in, the Depositary or other Person with respect to
the accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depositary) 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 the
Depositary or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only through the
Depositary subject to the applicable rules and procedures of the Depositary.
The Trustee may rely and shall be fully protected in relying upon information
furnished by the Depositary with respect to its members, participants and any
beneficial owners.
39
(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 the
Depositary participants, members or beneficial owners in any Global Security);
PROVIDED that the Trustee shall have the right to require such certifications,
Opinions of Counsel or other documentation in respect of exchanges of beneficial
ownership interests in Global Securities for Definitive Securities as it may
reasonably request.
Section 2.7. REPLACEMENT SECURITIES.
If any 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 and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, the Company
shall issue and the Trustee, upon the receipt of a written authentication order
of the Company signed by two Officers of the Company, shall authenticate a
replacement Security if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Security is replaced. The Company and the Trustee
may charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
Section 2.8. OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. A Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.
If a Security is replaced pursuant to Section 2.7 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Securities payable on that date, then on and after that date
such Securities shall
40
be deemed to be no longer outstanding and shall cease to accrue interest.
Section 2.9. 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 and make them available for delivery in
exchange for temporary Securities.
Section 2.10. CUSIP NUMBER.
The Company in issuing the Securities may use a "CUSIP" number, and if
so, the Trustee shall use the CUSIP number in notices of redemption or exchange
as a convenience to Holders; PROVIDED that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities and that reliance may be placed only
on the other identification numbers printed on the Securities.
In the event that the Company shall issue and the Trustee shall
authenticate any Subsequent Series Securities pursuant to Section 2.2, the
Company shall use its best efforts to obtain the same CUSIP number for such
Subsequent Series Securities as is printed on the Securities outstanding at such
time; PROVIDED, HOWEVER, that if any series of Subsequent Series Securities is
determined to be a different class of security than the Securities outstanding
at such time for federal income tax purposes, the Company may obtain a CUSIP
number for such series of Subsequent Series Securities that is different from
the CUSIP number printed on the Securities then outstanding.
Section 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and 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, replacement or cancellation and
shall destroy cancelled Securities (subject to the record retention requirements
of the Exchange Act). Certification of the destruction of all cancelled
Securities shall be delivered to the Company. The Company may not issue new
Securities to replace Securities that it has paid or that have been delivered to
the Trustee for cancellation.
41
Section 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Securities,
it shall pay the defaulted interest in any lawful manner PLUS, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate
provided in the Securities and in Section 4.1 hereof. The Company shall
notify the Trustee in writing of the amount of defaulted interest proposed to
be paid on each Security and the date of the proposed payment. The Company
shall fix or cause to be fixed each such special record date and payment
date, PROVIDED that no such special record date shall be less than 10 days
prior to the related payment date for such defaulted interest. At least 15
days before the special record date, the Company (or, upon the written
request of the Company, the Trustee in the name and at the expense of the
Company) shall mail or cause to be mailed to Holders a notice that states the
special record date, the related payment date and the amount of such interest
to be paid.
SECTION 2.13. FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS TO INSTITUTIONAL ACCREDITED INVESTORS.
[Date]
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Dear Sirs:
This certificate is delivered to request a transfer of $________
principal amount of the 10 1/4% Senior Subordinated Notes due 2008 (the
"Securities") of Continental Resources, Inc. (the "Company").
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.
42
(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 which 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 xxxxx (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.
TRANSFEREE:
----------------------------
BY
--------------------------------------
43
SECTION 2.14. FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S.
[Date]
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Re: Continental Resources, Inc.
10 1/4% SENIOR SUBORDINATED NOTES DUE 2008 (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(b) or Rule 904(b) 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(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
44
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate
have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-------------------------------------
----------------------------------------
Authorized Signature Medallion Guaranteed
SECTION 2.15. COMPUTATION OF INTEREST. Interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.1. NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of Section 3.7 hereof, then it shall furnish to the
Trustee, at least 30 days but not more than 60 days before a redemption date,
an Officers' Certificate setting forth (i) the paragraph of the Securities
and/or Section of this Indenture pursuant to which the redemption shall occur,
(ii) the redemption date, (iii) the principal amount of Securities to be
redeemed and (iv) the redemption price.
Section 3.2. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed at any time,
selection of Securities for redemption shall 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 so listed, on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate; PROVIDED that no Security of $1,000
or less shall be redeemed in part. In the event of partial redemption by
lot, the particular Securities to be redeemed shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to
the redemption date by the Trustee from the outstanding Securities not
previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected
for partial redemption, the principal amount thereof to be redeemed.
Securities and portions
45
of Securities selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Securities of a Holder are to be redeemed,
the entire outstanding amount of Securities held by such Holder, even if not
a multiple of $1,000, shall be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof shall be issued in the name of the
Holder thereof upon cancellation of the original Security. On and after the
redemption date, unless the Company defaults in payment of the redemption
price, interest ceases to accrue on Securities or portions of them called for
redemption. Except as provided in this Section 3.2, provisions of this
Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
The provisions of the two preceding paragraphs of this Section 3.2
shall not apply with respect to any redemption affecting only a Global Note,
whether such Global Note is to be redeemed in whole or in part. In case of
any such redemption in part, the unredeemed portion of the principal amount
of the Global Note shall be in an authorized denomination.
Section 3.3. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.9 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company shall mail or
cause to be mailed, by first class mail, a notice of redemption to each
Holder of Securities to be redeemed at such Holder's registered address,
provided, however, that the Company shall provide notice to the Trustee in
accordance with Section 3.1 hereof at least five days prior to the mailing of
the notice pursuant to this Section 3.3.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
redemption date upon surrender of such Security, a new Security or Securities
in principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Security;
(d) the name and address of the Paying Agent;
(e) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Securities called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Securities and/or Section of
46
this Indenture pursuant to which the Securities called for redemption are
being redeemed, and, if the redemption is to occur pursuant to Section 3.7, a
description of the transaction or transactions that constitute the Change of
Control; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Securities.
If any of the Securities to be redeemed is in the form of a Global
Note, then such notice shall be modified in form but not substance to the
extent appropriate to accord with the procedures of the Depositary applicable
to redemptions.
At the Company's request and expense, the Trustee shall give the
notice of redemption in the Company's name; PROVIDED, HOWEVER, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, a notice signed by two officers requesting that the Trustee
give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.
Section 3.4. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3
hereof, Securities called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.5. DEPOSIT OF REDEMPTION PRICE.
Prior to 10:00 a.m. New York City time on any redemption date, the
Company shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption price of and accrued interest on all Securities to be
redeemed on that date. The Trustee or the Paying Agent shall promptly return to
the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption price of and
accrued interest on, all Securities to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue
on the Securities or the portions of Securities called for redemption. If a
Security is redeemed on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest shall
be paid to the Person in whose name such Security was registered at the close
of business on such record date. If any Security called for redemption shall
not be so paid upon surrender for redemption because of the failure of the
Company to comply with the preceding paragraph, interest shall be paid on the
unpaid principal, from the redemption date until such principal is paid, and
to the extent lawful on any interest not paid on such unpaid principal, in
each case at the rate provided in the Securities and in Section 4.1 hereof.
47
Section 3.6. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Company
shall issue and, upon the receipt of a written authentication order of the
Company signed by two Officers of the Company, the Trustee shall authenticate
for the Holder at the expense of the Company a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.
Section 3.7. OPTIONAL REDEMPTION.
(a) Except as set forth in clauses (b) and (c) of this Section
3.7, the Company shall not have the option to redeem the Securities pursuant
to this Section 3.7 prior to August 1, 2003. From and after August 1, 2003,
the Company shall have the option to redeem the Securities, in whole or in
part, upon not less than 30 nor more than 60 days notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on August 1 of each of the
years indicated below:
Percentage of
Year Principal Amount
---- ----------------
2003........................ 105.125%
2004........................ 103.417%
2005........................ 101.708%
2006 and thereafter......... 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section
3.7, at any time prior to August 1, 2001, the Company may, at its option, on
any one or more occasions, redeem up to 35% of the original aggregate
principal amount of Securities at a redemption price of 110.25% of the
principal amount thereof, plus accrued and unpaid interest, if any, thereon
to the redemption date with all or a portion of the net proceeds of public
sales of common stock of the Company (the "Common Stock"); PROVIDED that at
least 65% of the original aggregate principal amount of Securities remains
outstanding immediately after the occurrence of such redemption; and
PROVIDED, FURTHER, that such redemption shall occur within 60 days of the
date after the closing of the related sale of such Common Stock.
(c) Notwithstanding the provisions of clause (a) of this Section
3.7, upon the occurrence of a Change of Control at any time on or prior to
August 1, 2003, the Company may, at its option, redeem in whole but not in
part, the Securities at a redemption price equal to 100% of the principal
amount thereof, plus the Applicable Premium as of, and accrued but unpaid
interest, if any, to, the date of redemption (the "Change of
48
Control Redemption Payment") (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant interest
payment date) provided that such redemption shall be made no more than 90
days after the occurrence of a Change of Control. Provided the Company
complies with Section 3.3 and the other provisions hereof applicable to such
redemption, a redemption pursuant to this Section 3.7(c) can occur
simultaneously with the occurrence of a Change of Control. Notwithstanding
any provision of Section 3.7(d), the Company shall notify the Trustee and, by
mail, the Holders of the Securities of its decision to redeem the Securities
pursuant to this Section 3.7(c) no later than 30 days after the occurrence of
a Change of Control.
(d) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Sections 3.1 through 3.6 hereof and, as to
Section 3.7(c) only, pursuant to the provisions of Section 4.13.
Section 3.8. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.13 hereof, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Securities.
Section 3.9. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company
shall be required to commence an offer to all Holders of Securities and, to
the extent required by the terms thereof, to all holders or lenders of other
Pari Passu Indebtedness, to purchase Securities and any such Pari Passu
Indebtedness (an "ASSET SALE OFFER"), it shall follow the procedures
specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "OFFER PERIOD"). No later
than five Business Days after the termination of the Offer Period (the
"PURCHASE DATE"), the Company shall purchase the principal amount of
Securities required to be purchased pursuant to Section 4.10 hereof, giving
effect to any related offer for Pari Passu Indebtedness pursuant to Section
4.10, (the "OFFER AMOUNT") or, if less than the Offer Amount has been
tendered, all Securities tendered in response to the Asset Sale Offer.
Payment for any Securities so purchased shall be made in the same manner as
interest payments are made.
If the Purchase Date is on or after an interest record date and on
or before the related interest payment date, any accrued and unpaid interest
shall be paid to the Person in whose name a Security is registered at the
close of business on such record date, and no additional interest shall be
payable to
49
Holders who tender Securities pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders.
The notice shall contain all instructions and materials necessary to enable
such Holders to tender Securities pursuant to the Asset Sale Offer. The
Asset Sale Offer shall be made to all Holders. The notice, which shall
govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.9 and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Security not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any
Security accepted for payment pursuant to the Asset Sale Offer shall cease
to accrue interest after the Purchase Date;
(e) that Holders electing to have a Security purchased pursuant to an
Asset Sale Offer may only elect to have all of such Security purchased and
may not elect to have only a portion of such Security purchased;
(f) that Holders electing to have a Security purchased pursuant to
any Asset Sale Offer shall be required to surrender the Security, with the
form entitled "OPTION OF HOLDER TO ELECT PURCHASE" on the reverse of the
Security completed, or transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three Business Days before the Purchase
Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Security the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such
Security purchased;
(h) that, if the aggregate principal amount of Securities surrendered
by Holders exceeds the Offer Amount, the Company shall select the
Securities to be purchased on a PRO RATA basis (with such adjustments as
may be deemed appropriate by the Company so that only Securities in
denominations of $1,000, or integral multiples thereof, shall be purchased)
in the manner provided in Section 4.10;
50
and
(i) that Holders whose Securities were purchased only in part shall
be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered (or transferred by book-entry
transfer).
If any of the Securities subject to an Asset Sale Offer is in the
form of a Global Note, then such notice may be modified in form but not
substance to the extent appropriate to accord with the procedures of the
Depositary applicable to repurchases.
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a PRO RATA basis to the extent necessary, the
Offer Amount of Securities or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all
Securities tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Securities or portions thereof were accepted
for payment by the Company in accordance with the terms of this Section 3.9.
The Company, the Depositary or the Paying Agent, as the case may be, shall
promptly (but in any case not later than five days after the Purchase Date)
mail or deliver to each tendering Holder an amount equal to the purchase
price of the Securities tendered by such Holder and accepted by the Company
for purchase, and the Company shall promptly issue a new Security, and the
Trustee, upon receipt of a written authentication order of the Company signed
by two Officers of the Company, shall authenticate and mail or deliver such
new Security to such Holder, in a principal amount equal to any unpurchased
portion of the Security surrendered. Any Security not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Asset Sale Offer on the
Purchase Date.
Other than as specifically provided in this Section 3.9, any
purchase pursuant to this Section 3.9 shall be made pursuant to the
provisions of Sections 3.1 through 3.6 hereof.
ARTICLE 4
COVENANTS
Section 4.1. PAYMENT OF SECURITIES.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Securities on the dates and in the
manner provided in the Securities. Principal, premium, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than
the Company or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on
the due date money deposited by the Company in immediately available funds
and designated for and sufficient to pay all such amounts then due.
The Company shall pay interest (including post-petition
51
interest in any proceeding under any Bankruptcy Law) on overdue principal at
the rate equal to 1% per annum in excess of the then applicable interest rate
on the Securities to the extent lawful; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at
the same rate to the extent lawful.
Section 4.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where principal,
premium, if any, and interest on the Securities will be paid and where
Securities may be surrendered for registration of transfer or for exchange
and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the following office of an Affiliate
of the Trustee as one such office or agency of the Company in accordance with
Section 2.3: the Corporate Trust Office of the Trustee.
52
Section 4.3. COMMISSION REPORTS.
Notwithstanding that the Company is not subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall
file with the Commission and, within 15 days after such filing, provide the
Trustee and Holders and prospective Holders (upon request) with the annual
reports and the information, documents and other reports which are specified
in Sections 13 and 15(d) of the Exchange Act (but without exhibits in the
case of the Holders and prospective Holders). In the event that the Company
is not permitted to file such reports, documents and information with the
Commission, the Company will provide substantially similar information to the
Trustee, the Holders and prospective Holders as if the Company were subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act
within 15 days of the date the Company would have been obligated to file such
reports with the Commission, were the Company permitted to file such reports
with the Commission. The Company also will comply with the other provisions
of Section 314(a) of the Trust Indenture Act.
Section 4.4. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review
of the activities of the Company and its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with
a view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to
each such Officer signing such certificate, that to the best of his or her
knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of
this Indenture (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action the Company is taking or proposes to take with
respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of
the principal of, premium, if any, or interest on the Securities is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto. As of
the date hereof, the Company's fiscal year ends on December 31 of each
calendar year. In the event the Company changes its fiscal year, it shall
promptly notify the Trustee of such change.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the fiscal year-end
financial statements delivered pursuant to Section 4.3 above shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
53
making the examination necessary for certification of such financial
statements, nothing has come to their attention that would lead them to
believe that the Company has violated any provisions of Article 4 or Article
5 hereof or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, within five Business Days of any Officer
becoming aware of any Default or Event of Default, a certificate of two
officers specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.
Section 4.5. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate
proceedings or where the failure to effect such payment is not adverse in any
material respect to the Holders of the Securities.
Section 4.6. STAY, EXTENSION AND USURY LAWS.
Each of the Company and the Subsidiary Guarantors covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and each of the Company and the Subsidiary Guarantors (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted
to the Trustee, but shall suffer and permit the execution of every such power
as though no such law has been enacted.
54
Section 4.7. RESTRICTED PAYMENTS.
The Company shall not and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
make any other payment or distribution on account of the Equity Interests of
the Company or any Restricted Subsidiary (including, without limitation, any
payment in connection with any merger or consolidation involving the Company)
to the direct or indirect holders of Equity Interests of the Company or any
Restricted Subsidiary in their capacity as such (other than dividends or
distributions payable in Equity Interests of the Company or a Restricted
Subsidiary (other than Disqualified Stock) and other than dividends or
distributions payable to the Company or a Restricted Subsidiary so long as,
in the case of any dividend or distribution payable on or in respect of any
class or series of securities issued by a Subsidiary other than a Wholly
Owned Restricted Subsidiary, the Company or a Restricted Subsidiary receives
at least its pro rata share of such dividend or distribution in accordance
with its Equity Interests in such class or series of securities); (ii)
purchase, redeem or otherwise acquire or retire for value any Equity
Interests of the Company or any Subsidiary of the Company that is not a
Wholly Owned Restricted Subsidiary of the Company; (iii) make any principal
payment on, or purchase, redeem, defease or otherwise acquire or retire for
value any Indebtedness that is subordinated to the Securities, except at
final maturity or as a mandatory or sinking fund repayment; or (iv) make any
Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.9 hereof; and
(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries
after the date of this Indenture (excluding Restricted Payments permitted
by clauses (1), (3), (4) and (6) of the next succeeding paragraph), is less
than the sum of (i) 50% of the Consolidated Net Income of the Company for
the period (taken as one accounting period) from the beginning of the first
fiscal quarter commencing after the date of this Indenture to the end of
the Company's most recently ended fiscal quarter for which internal
financial statements are
55
available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), PLUS (ii) 100% of the aggregate net cash proceeds received by
the Company from the issue or sale since the date of this Indenture of
Equity Interests of the Company or of debt securities of the Company
that have been converted into or exchanged for such Equity Interests
(other than Equity Interests (or convertible debt securities) sold to a
Subsidiary of the Company and other than Disqualified Stock or debt
securities that have been converted into Disqualified Stock), PLUS
(iii) to the extent that any Restricted Investment that was made after
the date of this Indenture is sold for cash or otherwise liquidated or
repaid for cash or the receipt of properties used in the Oil and Gas
Business, the lesser of (A) the net cash proceeds of such sale,
liquidation or repayment or the fair market value of property received
in exchange therefor and (B) the amount of such Restricted Investment;
PROVIDED, however, that the foregoing provisions of this paragraph (c)
will not prohibit Restricted Payments in an aggregate amount not to
exceed $15 million.
The foregoing provisions shall not prohibit (1) the payment of any
dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the provisions of
this Indenture; (2) the redemption, repurchase, retirement or other
acquisition of any Equity Interests of the Company in exchange for, or out of
the proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of other Equity Interests of the Company (other
than any sale of Disqualified Stock); PROVIDED that the amount of any such
net cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(ii) of the
preceding paragraph; (3) the defeasance, redemption or repurchase of
Subordinated Indebtedness with the net cash proceeds from an incurrence of
subordinated Permitted Refinancing Debt or the substantially concurrent sale
(other than to a Subsidiary of the Company) of Equity Interests (other than
Disqualified Stock) of the Company; PROVIDED that the amount of any such net
cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(ii) of the
preceding paragraph; (4) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company or any Subsidiary
of the Company held by any of the Company's (or any of its Subsidiaries')
employees pursuant to any management equity subscription agreement or stock
option agreement in effect as of the date of this Indenture; PROVIDED that
the aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests shall not exceed $2.0 million in any twelve-month
period; and PROVIDED FURTHER that no Default or Event of Default shall have
occurred and be continuing immediately after such transaction; (5)
repurchases of Equity Interests deemed to occur upon exercise of stock
options if such Equity Interests represent a portion of
56
the exercise price of such options; (6) the making of loans by the Company or
any of its Restricted Subsidiaries to officers or directors of the Company;
PROVIDED that the aggregate outstanding amount of such loans shall not
exceed, at any time, $2.0 million plus any such loans outstanding on the date
of this Indenture; and (7) during the period the Company is subject to
Subchapter S of the Code, and after such period to the extent relating to the
liability for such period, the making of payments or distributions or the
payment of dividends in amounts equal to the amounts required for the
Company's stockholders to pay Federal, state and local income taxes to the
extent such income taxes are attributable to the taxable income of the
Company.
The amount of all Restricted Payments (other than cash) shall be the
fair market value (as determined in good faith by a resolution of the Board
of Directors set forth in a certificate of two officers delivered to the
Trustee, which determination shall be conclusive evidence of compliance with
this provision) on the date of the Restricted Payment of the asset(s)
proposed to be transferred by the Company or the applicable Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. Not
later than five days after the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officer's Certificate stating that
such Restricted Payment is permitted and setting forth the basis upon which
the calculations required by this Section 4.7 were computed.
In computing Consolidated Net Income of the Company for purposes of this
Section 4.7, (1) the Company shall use audited financial statements for the
portions of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based on the books and records of the Company
for the remaining portion of such period and (2) the Company shall be
permitted to rely in good faith on the financial statements and other
financial data derived from the books and records of the Company that are
available on the date of determination. If the Company makes a Restricted
Payment which, at the time of the making of such Restricted Payment, would on
the good faith determination of the Company be permitted under the
requirements of this Indenture, such Restricted Payment shall be deemed to
have been made in compliance with this Indenture notwithstanding any
subsequent adjustments made in good faith to the Company's financial
statements affecting Consolidated Net Income of the Company for any period.
Section 4.8. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer
to exist or become effective any encumbrance or restriction on the ability of
any Restricted Subsidiary to (i)(x) pay dividends or make any other
distributions to the Company or any of the Restricted Subsidiaries of the
Company (1) on its Capital Stock or (2) with
57
respect to any other interest or participation in, or measured by, its
profits, or (y) pay any Indebtedness owed to the Company or any Restricted
Subsidiaries of the Company, (ii) make loans or advances to the Company or
any Restricted Subsidiaries of the Company or (iii) transfer any of its
properties or assets to the Company or any Restricted Subsidiaries of the
Company, except for such encumbrances or restrictions existing under or by
reason of (a) the Existing Credit Facility as in effect as of the date of
this Indenture, and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof or
any other Credit Facility, PROVIDED that such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements,
refinancings or other Credit Facilities are no more restrictive with respect
to such dividend and other payment restrictions than those contained in the
Existing Credit Facility as in effect on the date of this Indenture, (b) this
Indenture and the Securities, (c) applicable law, (d) any instrument
governing Indebtedness or Capital Stock of a Person acquired by the Company
or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except, in the case of Indebtedness, to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person and
its Subsidiaries, or the property or assets of the Person and its
Subsidiaries, so acquired, PROVIDED that, such Indebtedness or Capital Stock
was permitted by the terms of this Indenture to be incurred, (e) by reason of
customary non-assignment provisions in leases entered into in the ordinary
course of business, (f) purchase money obligations for property acquired in
the ordinary course of business that impose restrictions of the nature
described in clause (iii) above on the property so acquired, (g) Permitted
Refinancing Debt, PROVIDED that the restrictions contained in the agreements
governing such Permitted Refinancing Debt are no more restrictive than those
contained in the agreements governing the Indebtedness being refinanced, or
(h) any other security agreement, instrument or document relating to Senior
Debt hereafter in effect, provided that such encumbrances or restrictions are
customary in connection with such documents and that the terms and conditions
of such encumbrances or restrictions are no more restrictive than those
encumbrances or restrictions imposed in connection with the Existing Credit
Facility, (i) Permitted Liens, (j) customary provisions in joint venture
agreements and other similar agreements relating to the distribution of
revenues from such joint venture or other business venture, or (k) any
agreement relating to a sale and leaseback transaction or capital lease, but
only on the property subject to such transaction or lease and only to the
extent that such restrictions or encumbrances are customary with respect to a
sale and leaseback transaction or capital lease.
58
Section 4.9. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
DISQUALIFIED STOCK.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness or issue
any Disqualified Stock and the Company shall not permit any of its Restricted
Subsidiaries to issue any shares of Disqualified Stock to any Person other
than the Company or a Wholly-Owned Restricted Subsidiary of the Company;
PROVIDED, HOWEVER, that the Company and any Subsidiary Guarantor may incur
Indebtedness or issue shares of Disqualified Stock if:
(i) the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock is issued
would have been at least 2.5 to 1, determined on a pro forma basis as set
forth in the definition of Fixed Charge Coverage Ratio; and
(ii) no Default or Event of Default shall have occurred and be
continuing at the time such additional Indebtedness is incurred or such
Disqualified Stock is issued or would occur as a consequence of the
incurrence of the additional Indebtedness or the issuance of the
Disqualified Stock.
Notwithstanding the foregoing, this Indenture shall not prohibit any of
the following (collectively, "Permitted Indebtedness"): (a) the Indebtedness
evidenced by the Securities; (b) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness pursuant to Credit Facilities, so
long as the aggregate principal amount of all Indebtedness outstanding under
all Credit Facilities does not, at any one time, exceed the greater of (i)
$175 million and (ii) the Borrowing Base, provided that the Company may incur
more than $175 million of Indebtedness pursuant to Credit Facilities only if
the Fixed Charge Coverage Ratio for the Company's most recently ended four
full fiscal quarters for which internal financial statements are available
would have been at least 2.0 to 1, determined on a pro forma basis as set
forth in the definition of Fixed Charge Coverage Ratio; (c) the guarantee by
any Subsidiary Guarantor of any Indebtedness that is permitted by this
Indenture to be incurred by the Company; (d) all Indebtedness of the Company
and its Restricted Subsidiaries in existence as of the date of this
Indenture; (e) intercompany Indebtedness between or among the Company and any
of its Wholly Owned Restricted Subsidiaries; PROVIDED, HOWEVER, that if the
Company is the obligor on such Indebtedness, (i) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness being held
by a Person other than the Company or a Wholly Owned Restricted Subsidiary
and (ii) any sale or other
59
transfer of any such Indebtedness to a Person that is not either the Company
or a Wholly Owned Restricted Subsidiary shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be; (f) Indebtedness in connection
with one or more standby letters of credit, guarantees, performance bonds or
other reimbursement obligations, in each case, issued in the ordinary course
of business and not in connection with the borrowing of money or the
obtaining of advances or credit (other than advances or credit on open
account, includible in current liabilities, for goods and services in the
ordinary course of business and on terms and conditions which are customary
in the Oil and Gas Business, and other than the extension of credit
represented by such letter of credit, guarantee or performance bond itself),
not to exceed in the aggregate at any given time 5.0% of Total Assets; (g)
Indebtedness under Interest Rate Hedging Agreements entered into for the
purpose of limiting interest rate risks, PROVIDED that the obligations under
such agreements are related to payment obligations on Indebtedness otherwise
permitted by the terms of this covenant and that the aggregate notional
principal amount of such agreements does not exceed 105% of the principal
amount of the Indebtedness to which such agreements relate; (h) Indebtedness
under Oil and Gas Hedging Contracts, PROVIDED that such contracts were
entered into in the ordinary course of business for the purpose of limiting
risks that arise in the ordinary course of business of the Company and its
Restricted Subsidiaries; (i) the incurrence by the Company and its Restricted
Subsidiaries of Indebtedness not otherwise permitted to be incurred pursuant
to this paragraph, PROVIDED that the aggregate principal amount of all
Indebtedness incurred pursuant to this clause (i), together with all
Permitted Refinancing Debt incurred pursuant to clause (j) of this paragraph
in respect of Indebtedness previously incurred pursuant to this clause (i),
does not exceed $20.0 million at any one time outstanding; (j) Permitted
Refinancing Debt incurred in exchange for, or the net proceeds of which are
used to refinance, extend, renew, replace, defease or refund, Indebtedness
that was permitted by this Indenture to be incurred (including Indebtedness
previously incurred pursuant to this clause (j), but excluding Indebtedness
under clauses (b), (e), (f), (g), (h), (k), (l) and (m)); (k) accounts
payable or other obligations of the Company or any Restricted Subsidiary to
trade creditors created or assumed by the Company or such Restricted
Subsidiary in the ordinary course of business in connection with the
obtaining of goods or services; (l) Indebtedness consisting of obligations in
respect of purchase price adjustments, guarantees or indemnities in
connection with the acquisition or disposition of assets; (m) production
imbalances occurring in the ordinary course of business that do not, at any
one time outstanding, exceed 2% of the Total Assets of the Company; (n) rents
and royalties due others incurred in the ordinary course of the Oil and Gas
Business; and (o) Indebtedness of a Subsidiary Guarantor in respect of the
Subsidiary Guarantee of such Subsidiary Guarantor.
The Company shall not permit any Unrestricted
60
Subsidiary to incur any Indebtedness other than Non-Recourse Debt; provided,
however, if any such Indebtedness ceases to be Non-Recourse Debt, such event
shall be deemed to constitute an incurrence of Indebtedness by the Company.
Section 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in an Asset Sale unless (i) the Company or the
Restricted Subsidiary, as the case may be, receives consideration at the time
of such Asset Sale at least equal to the fair market value (as determined in
good faith by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee, which determination shall be
conclusive evidence of compliance with this provision) of the assets or
Equity Interests issued or sold or otherwise disposed of and (ii) at least
85% of the consideration therefor received by the Company or such Restricted
Subsidiary from such Asset Sale is in the form of cash, Cash Equivalents,
properties and capital assets to be used by the Company or any Restricted
Subsidiary in the Oil and Gas Business or oil and gas properties owned or
held by another Person which are to be used in the Oil and Gas Business of
the Company or its Restricted Subsidiaries, or any combination thereof
(collectively the "cash consideration"); PROVIDED that the amount of (x) any
liabilities (as shown on the Company's or such Restricted Subsidiary's most
recent balance sheet) of the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated
to the Securities or any guarantee thereof) that are assumed by the
transferee of any such assets pursuant to a customary novation agreement that
releases the Company or such Restricted Subsidiary from further liability and
(y) any non-cash consideration received by the Company or any such Restricted
Subsidiary from such transferee that are converted by the Company or such
Restricted Subsidiary into cash within 180 days of closing such Asset Sale,
shall be deemed to be cash for purposes of this provision (to the extent of
the cash received); PROVIDED, HOWEVER, that the Company and its Restricted
Subsidiaries may make Asset Sales with a fair market value not exceeding $10
million in the aggregate in each fiscal year free from any of the
restrictions, requirements or other provisions set forth in this Section 4.10.
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option, in any order or
combination, (a) to reduce Senior Debt or Guarantor Senior Debt, (b) to make
Permitted Investments, (c) to make investments in interests in other Oil and
Gas Businesses or (d) to make capital expenditures in respect of the
Company's or its Restricted Subsidiaries' Oil and Gas Business or to purchase
long-term assets that are used or useful in the Oil and Gas Business.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce Senior Debt that is revolving debt or otherwise invest
such Net Proceeds in any manner that is not prohibited by this Indenture.
Any Net
61
Proceeds from Asset Sales that are not applied as provided in the first
sentence of this paragraph shall (after the expiration of the periods
specified in this paragraph) be deemed to constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $15 million, the
Company shall make an Asset Sale Offer to purchase the maximum principal amount
of Securities and any other Pari Passu Indebtedness to which the Asset Sale
Offer applies that may be purchased out of the Excess Proceeds, at an offer
price in cash in an amount equal to, in the case of the Securities, 100% of the
principal amount thereof plus accrued and unpaid interest thereon to the date of
purchase or, in the case of any other Pari Passu Indebtedness, 100% of the
principal amount thereof (or with respect to discount Pari Passu Indebtedness,
the accrued value thereof) on the date of purchase, in each case, in accordance
with the procedures set forth in Section 3.9 hereof or the agreements governing
Pari Passu Indebtedness, as applicable. To the extent that the aggregate
principal amount (or accreted value, as the case may be) of the Securities and
Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the sum of (i) the aggregate principal amount of
Securities surrendered by Holders thereof, and (ii) the aggregate principal
amount or accreted value, as the case may be, of other Pari Passu Indebtedness
surrendered by holders or lenders thereof, exceeds the amount of Excess
Proceeds, the Trustee and the trustee or other lender representatives for the
Pari Passu Indebtedness shall select the Securities and other Pari Passu
Indebtedness to be purchased on a pro rata basis, based on the aggregate
principal amount (or accreted value, as applicable) thereof surrendered in such
Asset Sale Offer. Upon completion of such Asset Sale Offer, Excess Proceeds
shall be reset at zero.
Section 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or make or amend any contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any of its Affiliates (each of the
foregoing, an "Affiliate Transaction"), unless (i) such Affiliate Transaction is
on terms that are no less favorable to the Company or the relevant Subsidiary
than those that would have been obtained in a comparable transaction by the
Company or such Subsidiary with an unrelated Person and (ii) the Company
delivers to the Trustee (a) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in excess of
$1.0 million but less than or equal to $5.0 million, an Officers' Certificate to
the Trustee certifying that such Affiliate Transaction complies with clause (i)
above, (b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $5.0
million but less than or equal to
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$10 million, a resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction or series of related
Affiliate Transactions complies with clause (i) above and that such Affiliate
Transaction or series of related Affiliate Transactions has been approved in
good faith by a majority of the members of the Board of Directors who have no
financial interest in such Affiliate Transactions, which resolution shall be
conclusive evidence of compliance with this provision and (c) with respect to
any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $10 million, an Officer's
Certificate as described in clause (b) above and an opinion as to the
fairness to the Company or such Subsidiary of such Affiliate Transaction from
a financial point of iew issued by an accounting, appraisal, engineering or
investment banking firm of national standing (for purposes of this clause (c)
such opinion and the resolution described in clause (b) above shall be
conclusive evidence of compliance with this provision); PROVIDED that the
following shall not be deemed Affiliate Transactions: (1) reasonable fees
and compensation paid to (including issuances and grants of securities and
stock options), and employment agreements and stock option and ownership
plans for the benefit of, officers, directors, employees or consultants of
the Company or any Restricted Subsidiary of the Company as determined in good
faith by the Company's Board of Directors or senior management, (2)
transactions contemplated by any employment agreement or other compensation
plan or arrangement entered into by the Company or any of its Subsidiaries in
the ordinary course of business and consistent with past practice of the
Company or such Subsidiary, (3) transactions between or among the Company
and/or its Restricted Subsidiaries, (4) Restricted Payments and Permitted
Investments that are permitted by Section 4.7 and the definition of Permitted
Investments, (5) indemnification payments made to officers, directors and
employees of the Company or its Subsidiaries pursuant to charter, by-law,
statutory or contractual provisions, (6) any contracts, agreements,
understandings existing as of the date of this Indenture and (7) oil and gas
leasehold acquisition, drilling, well servicing and leasehold operations
services provided by or to any Affiliate in the ordinary course of the Oil
and Gas Business on terms that are no less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person.
Section 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien securing Indebtedness of any kind (other than
Permitted Liens) upon any of its property or assets, now owned or hereafter
acquired, unless all payments under the Securities are secured by such Lien
prior to, or on an equal and ratable basis with, the Indebtedness so secured for
so long as such Indebtedness is secured by such Lien.
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Section 4.13. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of the
Securities shall, unless the Company shall have elected to redeem the Securities
prior to August 1, 2003 pursuant to Section 3.7(c), 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 pursuant to the offer described
below (the "CHANGE OF CONTROL OFFER") at an offer price in cash equal to 101% of
the aggregate principal amount of the Securities plus accrued and unpaid
interest if any, thereon to the date of purchase (the "CHANGE OF CONTROL
PAYMENT"). Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder stating: (1) a description of the transaction or
transactions that constitute the Change of Control; (2) that the Change of
Control Offer is being made pursuant to this Section 4.13 and that all
Securities tendered shall be accepted for payment; (3) the purchase price and
the purchase date described below (the "CHANGE OF CONTROL PAYMENT DATE");
(4) that any Security not tendered shall continue to accrue interest, if any;
(5) that, unless the Company defaults in the payment of the Change of Control
Payment, all Securities accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest, if any, after the Change of Control
Payment Date; (6) that Holders electing to have any Securities purchased
pursuant to a Change of Control Offer shall be required to surrender the
Securities, with the form entitled "OPTION OF HOLDER TO ELECT PURCHASE" on the
reverse of the Securities completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third Business Day
preceding the Change of Control Payment Date; (7) that Holders shall be entitled
to withdraw their election if the Paying Agent receives, not later than the
close of business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of Securities delivered for
purchase, and a statement that such Holder is withdrawing his election to have
the Securities purchased; and (8) that Holders whose Securities are being
purchased only in part shall be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered, which unpurchased
portion must be equal to $1,000 in principal amount or an integral multiple
thereof. The Company and each Subsidiary Guarantor shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable to such party in connection with the repurchase of the Securities as
a result of a Change of Control.
(b) On a Business Day that is no earlier than 30 days nor later than
60 days from the date that the Company mails or causes to be mailed notice of
the Change of Control to the Holders (the "CHANGE OF CONTROL PAYMENT DATE"), the
Company shall, to the extent lawful, (i) accept for payment all
64
Securities or portions thereof properly tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all the Securities or portions
thereof 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 such Securities or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail to each
Holder of the Securities so tendered the Change of Control Payment for such
Securities, and the Trustee shall 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 shall be in a principal amount of
$1,000 or an integral multiple thereof. The Company shall publicly
announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(c) Prior to complying with the provisions this Section 4.13, but in
any event within 30 days following a Change of Control, the Company shall either
repay all outstanding Senior Debt or obtain the requisite consents, if any,
under all agreements governing outstanding Senior Debt to permit the repurchase
of the Securities required by this Section 4.13.
The Change of Control provisions described above shall be applicable
whether or not any other provisions of this Indenture are applicable.
The Company shall not be required to make a Change of Control Offer if
a third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in this Section 4.13 and
purchases all Securities (or portions thereof) validly tendered and not
withdrawn under such Change of Control Offer.
Section 4.14. ADDITIONAL SUBSIDIARY GUARANTEES.
In the event that the Company or any of its Restricted Subsidiaries
shall acquire or create another Restricted Subsidiary after the date of this
Indenture, the Company shall cause such newly acquired or created Restricted
Subsidiary to execute and deliver to the Trustee a Subsidiary Guarantee pursuant
to which such Restricted Subsidiary will guarantee, jointly and severally with
other Subsidiary Guarantors, to the Holders and the Trustee, subject to
subordination provisions in Article 10, the full and prompt payment of the
Securities in accordance with Article 11 and become a party to the Indenture.
65
Section 4.15. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company and the Subsidiaries shall do
or cause to be done all things necessary to preserve and keep in full force and
effect (i) its corporate existence, and the corporate, partnership or other
existence of each of the Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Subsidiary and (ii) the rights (charter, partnership
agreement and statutory), licenses and franchises of the Company and the
Subsidiaries; PROVIDED, HOWEVER, that the Company and the Subsidiaries shall not
be required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of the Subsidiaries, if the Board of
Directors of the relevant Person shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and the
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Securities.
Section 4.16. NO LAYERING.
Notwithstanding the provisions of Section 4.9 hereof, (i) the Company
shall not incur, create, issue, assume, guarantee or otherwise become liable for
any Indebtedness that is subordinate or junior in right of payment to any Senior
Debt of the Company and senior in any respect in right of payment to the
Securities and (ii) the Subsidiary Guarantors shall not directly or indirectly
incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to Guarantor
Senior Debt and senior in any respect in right of payment to the Subsidiary
Guarantees; PROVIDED, HOWEVER, that the foregoing limitations shall not apply to
distinctions between categories of Indebtedness that exist by reason of any
Liens arising or created in respect of some but not all such Indebtedness.
Section 4.17. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any material respect in any business other than the Oil and Gas
Business.
Section 4.18. SALE AND LEASEBACK TRANSACTIONS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; PROVIDED that
the Company or its Restricted Subsidiaries may enter into a sale and leaseback
transaction if (i) the Company could have incurred Indebtedness in an amount
equal to the Attributable Debt relating to such sale and leaseback transaction
pursuant to the first paragraph of Section 4.9 or (ii) the gross cash proceeds
of such sale and leaseback transaction are at least equal to the fair market
value (as determined in good faith by a resolution of the Board of
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Directors set forth in an Officers' Certificate delivered to the Trustee) of
the property that is subject to such sale and leaseback transaction and the
transfer of assets in such sale and leaseback transaction is permitted by,
and the Company applies the net proceeds of such transaction in compliance
with, the provisions of Section 4.10.
Section 4.19. DESIGNATION OF UNRESTRICTED SUBSIDIARIES.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated shall be deemed to be Restricted
Payments at the time of such designation and shall reduce the amount available
for Restricted Payments under clause (c) of the first paragraph of Section 4.7.
All such outstanding Investments shall be deemed to constitute Investments in an
amount equal to the greater of the fair market value or the book value of such
Investments at the time of such designation. Such designation shall only be
permitted if such Restricted Payment would be permitted at such time and if such
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
ARTICLE 5
SUCCESSORS
Section 5.1. MERGER, CONSOLIDATION, OR SALE OF SUBSTANTIALLY ALL
ASSETS.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets, in one or more related transactions, to another Person, and the Company
may not permit any of its Restricted Subsidiaries to enter into any such
transaction or series of transactions if such transaction or series of
transactions would, in the aggregate, result in a sale, assignment, transfer,
lease, conveyance, or other disposition of all or substantially all of the
properties or assets of the Company to another Person, in either case unless (i)
the Company is the surviving corporation or the Person formed by or surviving
any such consolidation or merger (if other than the Company) or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made (the "Surviving Entity") is a corporation organized or existing under
the laws of the United States, any state thereof or the District of Columbia;
(ii) the Surviving Entity (if the Company is not the continuing obligor under
this Indenture) assumes all the obligations of the Company under the Securities
and this Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee; (iii) immediately before and after giving effect to
such
67
transaction or series of transactions no Default or Event of Default exists;
(iv) immediately after giving effect to such transaction or series of
transactions on a pro forma basis (and treating any Indebtedness not
previously an obligation of the Company or any of its Restricted Subsidiaries
which becomes the obligation of the Company or any of its Restricted
Subsidiaries as a result of such transaction or series of transactions as
having been incurred at the time of such transaction or series of
transactions), the Consolidated Net Worth of the Company (if the Company is
not the continuing obligor under this Indenture) is equal to or greater han
the Consolidated Net Worth of the Company immediately prior to such
transaction or series of transactions and (v) the Company or Surviving Entity
(if the Company is not the continuing obligor under this Indenture) will, at
the time of such transaction or series of transactions and after giving pro
forma effect thereto as if such transaction or series of transactions had
occurred at the beginning of the applicable four-quarter period, be permitted
to incur at least $1.00 of additional Indebtedness pursuant to the test set
forth in the first paragraph of Section 4.9 hereof. Each Subsidiary
Guarantor, if any, unless it is the other party to the transactions described
above, shall have confirmed by supplemental indenture that its Subsidiary
Guarantee shall apply to such Person's obligations under the Indenture and
the Securities. Notwithstanding the foregoing clauses (iv) and (v), any
Restricted Subsidiary may consolidate with, merge into or transfer all or
part of its properties and assets to the Company, and any Wholly Owned
Restricted Subsidiary may consolidate with, merge into or transfer all or
part of its properties and assets to another Wholly Owned Restricted
Subsidiary.
None of the provisions of this Section 5.1 shall be deemed to prevent
the merger of the Company with an Affiliate incorporated solely for the purpose
of reincorporating the Company in another jurisdiction. This Section 5.1 shall
not apply to any consolidation, merger, sale, assignment, transfer, lease or
other disposition if the Company shall have elected to redeem the Securities
pursuant to Section 3.7 and such redemption takes place prior to or
simultaneously with the Company's consolidation or merger with or into another
Person.
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Section 5.2. SUCCESSOR CORPORATION SUBSTITUTED; SUBSIDIARY GUARANTORS
CONFIRMED.
(a) Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.1 hereof, the Surviving
Entity shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "COMPANY" shall refer instead to
the Surviving Entity and not to the Company), and may exercise every right and
power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; PROVIDED, HOWEVER, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Securities except in the case of a sale of all
of the Company's assets that meets the requirements of Section 5.1 hereof.
(b) Upon any consolidation or merger, or any sale, assignment,
transfer, lease conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.1 hereof, each Subsidiary
Guarantor (unless such Subsidiary Guarantor is the Surviving Entity) shall
confirm by executing a supplemental indenture that its Subsidiary Guarantee
guarantees the Surviving Entity's Obligations under this Indenture and the
Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" occurs if:
(1) the Company defaults in the payment of interest, if any, on the
Securities when the same becomes due and payable and the Default continues
for a period of 30 consecutive days, whether or not such payment is
prohibited by the provisions of Article 10 hereof;
(2) the Company defaults in the payment of the principal of or
premium, if any, on the Securities, whether or not such payment is
prohibited by the provisions of Article 10 hereof;
(3) the Company or a Subsidiary Guarantor fails to observe or perform
any covenant, condition or agreement on the part of the Company or a
Subsidiary Guarantor to be observed or performed pursuant to Article 5
hereof;
(4) the Company fails to observe or perform any covenant, condition
or agreement on the part of the Company to be observed or performed
pursuant to Sections 4.3, 4.7,
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4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18 and 4.19 hereof
and the Default continues for the period and after the notice specified
below;
(5) the Company fails to comply with any of its other agreements or
covenants in, or provisions of, the Securities or this Indenture and the
Default continues for 60 consecutive days after the notice specified below;
(6) except as permitted herein, any Subsidiary Guarantee shall be
held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or a Subsidiary
Guarantor, or any Person acting on behalf of a Subsidiary Guarantor, shall
deny or disaffirm such Subsidiary Guarantor's obligation under its
Subsidiary Guarantee;
(7) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries), whether such Indebtedness
or guarantee now exists or shall be created hereafter, which default (a) is
caused by a failure to pay principal of such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the date of
such default (a "PAYMENT DEFAULT") or (b) results in the acceleration of
such Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there is then existing a
Payment Default or the maturity of which has been so accelerated,
aggregates $10 million or more;
(8) a final non-appealable judgment or order or final non-appealable
judgments or orders are rendered against the Company or any Restricted
Subsidiary that remain unpaid or discharged for a period of 60 consecutive
days and that require the payment of money, either individually or in an
aggregate amount, in excess of $10 million;
(9) the Company or any Restricted Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(a) commences a voluntary case or proceeding,
(b) consents to the entry of an order for relief against it in
an involuntary case or proceeding,
(c) consents to the appointment of a Note Custodian of it or for
all or substantially all of its property or
(d) makes a general assignment for the benefit of its creditors;
70
(10) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company or any Restricted
Subsidiary in an involuntary case or proceeding,
(b) appoints a Custodian of the Company, any Restricted
Subsidiary or for all or substantially all of the property of the Company
or any Restricted Subsidiary or
(c) orders the liquidation of the Company or any Restricted
Subsidiary
and in each case the order or decree remains unstayed and in effect for 60
consecutive days.
The term "CUSTODIAN" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities notify the Company and the
Trustee, of the Default and the Company does not cure the Default within 30
consecutive days after receipt of the notice. A Default under clause (5) is not
an Event of Default until the Trustee notifies the Company, or the Holders of at
least 25% in aggregate principal amount of the then outstanding Securities
notify the Company and the Trustee, of the Default and the Company does not cure
the Default within 60 consecutive days after receipt of the notice. Each notice
must specify the Default, demand that it be remedied and state that the notice
is a "NOTICE OF DEFAULT."
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Section 6.2. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clauses (9) and (10) of Section 6.1 hereof) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities by written notice to the
Company and the Trustee, may declare the unpaid principal amount of and any
accrued and unpaid interest on all the Securities to be due and payable
immediately. If payment of the Securities is accelerated because of an Event of
Default, the Company or the Trustee shall notify the holders of Designated
Senior Debt of such acceleration. Upon such declaration the principal and
interest shall be due and payable immediately; PROVIDED, HOWEVER, that so long
as any Designated Senior Debt or any commitment therefor is outstanding, any
such notice or declaration shall not become effective until the earlier of
(a) five Business Days after such notice is delivered to the representative for
the Designated Senior Debt or (b) the acceleration of any Designated Senior Debt
and thereafter, payments on the Securities pursuant to this Article 6 shall be
made only to the extent permitted pursuant to Article 10 herein.
Notwithstanding the foregoing, if any Event of Default specified in clause (9)
or (10) of Section 6.1 hereof relating to the Company or any Restricted
Subsidiary occurs, such an amount shall IPSO FACTO become and be immediately due
and payable without any declaration or other act or notice on the part of the
Trustee or any Holder.
After a declaration of acceleration under this Indenture, but before a
judgment or decree for payment of principal, premium, if any, and interest on
the Securities due under this Article 6 has been obtained by the Trustee,
Holders of a majority in aggregate principal amount of the then outstanding
Securities by written notice to the Company and the Trustee may rescind an
acceleration and its consequences if (i) the Company or any Subsidiary Guarantor
has paid or deposited with the Trustee a sum sufficient to pay (a) all sums paid
or advanced by the Trustee under this Indenture and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
(b) all overdue interest on the Securities, if any, (ii) the rescission would
not conflict with any judgment or decree of a court of competent jurisdiction
and (iii) all existing Events of Default (except nonpayment of principal,
premium, if any, or interest that has become due solely because of the
acceleration) have been cured or waived.
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, premium, if
any, and 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
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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 Holder of a Security
in exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by law.
Section 6.4. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the Securities then outstanding by notice to the Trustee may on behalf of the
Holders of all of the Securities waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of principal of, premium and liquidated damages, if any, or
interest on, the Securities (including in connection with an offer to purchase)
(PROVIDED, HOWEVER, that the Holders of a majority in aggregate principal amount
of the then outstanding Securities may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 6.5. CONTROL BY MAJORITY.
Holders of a majority in aggregate principal amount of the then
outstanding Securities may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Securities or that
may involve the Trustee in personal liability it being understood that (subject
to Section 7.1) the Trustee shall have no duty to ascertain whether or not such
actions or forebearances are unduly prejudicial to such holders.
Section 6.6. LIMITATION ON SUITS.
A Holder of a Security may pursue a remedy with respect to this
Indenture or the Securities only if:
(a) the Holder of a Security gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount of the
then outstanding Securities make a written request to the Trustee to pursue
the remedy;
(c) such Holder of a Security or Holders of Securities offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or
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expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in aggregate
principal amount of the then outstanding Securities do not give the Trustee
a direction inconsistent with the request.
A Holder of a Security may not use this Indenture to prejudice the rights of
another Holder of a Security or to obtain a preference or priority over another
Holder of a Security.
Section 6.7. RIGHTS OF HOLDERS OF SECURITIES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal, premium, if any, and
interest on the Security, on or after the respective due dates expressed in the
Security (including in connection with an offer to purchase), or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
Section 6.8. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(1) or (2) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company or any Subsidiary Guarantor
for the whole amount of principal of, premium, if any, and interest remaining
unpaid on the Securities and interest on overdue principal and, to the extent
lawful, interest and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
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Section 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Securities allowed in any judicial proceedings relative to the
Company or any of the Subsidiary Guarantors (or any other obligor upon the
Securities), its creditors or its property and shall be entitled and empowered
to collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the Trustee, and in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7 hereof. To
the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.7 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding
provided, however, that the Truste may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and may be a member of
the creditors' committee.
Section 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall,
subject to the provisions of Article 10, pay out the money in the following
order:
FIRST: to the Trustee, its agents and attorneys for amounts due under
Sections 6.8 and 7.7 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
SECOND: to Senior Debt to the extent required by Article 10;
THIRD: to Holders of Securities for amounts due and unpaid on the
Securities for principal, premium, if any, and
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accrued interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal,
premium, if any, and accrued interest, as the case may be, respectively; and
FOURTH: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Securities pursuant to this Section 6.10.
Section 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Security pursuant to Section 6.7 hereof, or a suit by Holders of more than 10%
in principal amount of the then outstanding Securities.
Section 6.12. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then, and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Company, Trustee and the Holders shall
continue as though no such proceeding had been instituted.
ARTICLE 7
TRUSTEE
Section 7.1. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
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(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) 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 any notices, requests, statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) 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 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have furnished to the
Trustee security and indemnity satisfactory to it against any loss, liability or
expense.
(f) 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.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
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Section 7.2. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel. The Trustee may consult
with counsel and the written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent (other than any
agent who is an employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company or any Subsidiary
Guarantor shall be sufficient if signed by an Officer of the Company or such
Subsidiary Guarantor.
(f) 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 furnished to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
(g) Except with respect to Sections 4.1 and 4.4 hereof, the Trustee
shall have no duty to inquire as to the performance of the Company's covenants
in Article 4 hereof. In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default except (i) any Event of Default
occurring pursuant to Sections 4.1, 4.4 and 6.1(1) or (2) hereof or (ii) any
Default or Event of Default of which the Trustee shall have received written
notification. For purposes of determining the Trustee's responsibility
hereunder, whenever reference is made in this Indenture to a Default or Event of
Default, such reference shall be construed to refer only to a Default or Event
of Default of which the Trustee is deemed to have notice pursuant to this
Section 7.2(g)
(h) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties
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hereunder.
(i) the Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions, or agreements on the
part of the Company or any Subsidiary Guarantor, except as otherwise set forth
herein, but the Trustee may require of the Company full information and advice
as to the performance of the covenants, conditions and agreements contained
herein and shall be entitled in connection herewith to examine the books,
records and premises of the Company.
(j) The permissive rights of the Trustee to perform the acts
enumerated in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for other than its gross negligence or willful
misconduct.
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, the
Subsidiary Guarantors or any Affiliate of the Company with the same rights it
would have if it were not Trustee. However, in the event that the Trustee
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue as trustee or resign.
Any Agent may do the same with like rights and duties. The Trustee is also
subject to Sections 7.10 and 7.11 hereof.
Section 7.4. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Securities, or the
Subsidiary Guarantees, it shall not be accountable for the Company's use of the
proceeds from the Securities or any money paid to the Company or upon the
Company's direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or in any certificate delivered pursuant hereto or any statement
in the Securities or any other document in connection with the sale of the
Securities or pursuant to this Indenture other than its 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 it is
actually known to the Trustee, the Trustee shall mail to Holders of Securities a
notice of the Default or Event of Default within 90 days after it occurs.
Except in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on, any Security, the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Securities.
Section 7.6. REPORTS BY TRUSTEE TO HOLDERS OF THE SECURITIES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Securities remain outstanding,
the Trustee shall mail to the Holders of the Securities a brief report dated as
of such reporting date that complies with TIA Section 313(a) (but if no event
described in TIA Section 313(a) has occurred within the twelve months preceding
the reporting date, no report need be transmitted). The Trustee also shall
comply with TIA Section 313(b)(2) and transmit by mail all reports as required
by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Securities shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Securities are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Securities are
listed on any stock exchange.
Section 7.7. COMPENSATION AND INDEMNITY.
The Company and the Subsidiary Guarantors shall pay to the Trustee
from time to time reasonable compensation for its acceptance of this Indenture
and services hereunder, including, without limitation, extraordinary services
such as default administration. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company and
the Subsidiary Guarantors shall reimburse the Trustee upon demand for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Company and the Subsidiary Guarantors shall indemnify the Trustee
against any and all losses, liabilities or expenses incurred by it arising out
of or in connection with the acceptance or administration of its duties under
this Indenture, including the costs and expenses of enforcing this Indenture
against the Company and the Subsidiary Guarantors (including this Section 7.7)
and investigating or defending itself against any
80
claim (whether asserted by the Company, the Subsidiary Guarantors or any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent
any such loss, liability or expense may be attributable to its gross
negligence or bad faith. The Trustee shall notify the Company and the
Subsidiary Guarantors promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company and the Subsidiary Guarantors
shall not relieve the Company and the Subsidiary Guarantors of their
obligations hereunder. The Company and the Subsidiary Guarantors shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee
may have separate counsel and the Company and the Subsidiary Guarantors shall
pay the reasonable fees and expenses of such counsel. The Company and the
Subsidiary Guarantors need not pay for any settlement made without their
consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Subsidiary Guarantors under
this Section 7.7 are joint and several and shall survive the resignation or
removal of the Trustee, the satisfaction and discharge of this Indenture and any
rejection or termination under any Bankruptcy Law.
To secure the Company's and the Subsidiary Guarantors' 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. Such Lien
shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(9) or (10) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
Section 7.8. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Securities
of a majority in principal amount of the then outstanding Securities may remove
the Trustee by so notifying the Trustee and the Company in writing. The Company
may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
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(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding
Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Securities of at least 10% in principal amount of
the then outstanding Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Security
who has been a Holder of a Security for at least six months, fails to comply
with Section 7.10, such Holder of a Security may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of
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 Holders of the Securities. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor
Trustee, PROVIDED all sums owing to the Trustee hereunder have been paid and
subject to the Lien provided for in Section 7.7 hereof. Notwithstanding
replacement of the Trustee pursuant to this Section 7.8, the Company's
obligations under Section 7.7 hereof shall continue for the benefit of the
retiring Trustee and the Company shall pay to such replaced or removed
Trustee all amounts owed under Section 7.7 upon such replacement or removal.
Section 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
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Section 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States
of America or of any state thereof that is authorized under such laws to
exercise corporate trustee power, that is subject to supervision or
examination by federal or state authorities and that has a combined capital
and surplus of at least $50 million as set forth in its most recent published
annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject
to TIA Section 310(b).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to 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 therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.2 or 8.3 hereof be applied to all outstanding
Securities upon compliance with the conditions set forth below in this
Article 8.
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Section 8.2. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company and the Subsidiary Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.4
hereof, be deemed to have been discharged from their obligations with respect
to all outstanding Securities and the Subsidiary Guarantees thereof on the
date the conditions set forth below are satisfied (hereinafter, "LEGAL
DEFEASANCE"). For this purpose, Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Securities, which shall thereafter be deemed
to be "OUTSTANDING" only for the purposes of Section 8.5 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Securities and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following
provisions which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of outstanding Securities to receive
payments in respect of the principal of, premium, if any, and interest on
such Securities when such payments are due from the trust fund described in
Section 8.4 hereof, and as more fully set forth in such Section, (b) the
Company's obligations with respect to such Securities under Article 2 and
Section 4.2 hereof, (c) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's obligations in connection therewith
and (d) this Article 8. Subject to compliance with this Article 8, the
Company may exercise its option under this Section 8.2 notwithstanding the
prior exercise of its option under Section 8.3 hereof.
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Section 8.3. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, be released
from their obligations under the covenants contained in Sections 4.3, 4.5,
4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18 and 4.19 hereof
and in clause (iv) of Section 5.1 on and after the date the conditions set
forth below are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the
Securities shall thereafter be deemed not "OUTSTANDING" for the purposes of
any compliance certificate, direction, waiver, consent or declaration or act
of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "OUTSTANDING" for all other
purposes hereunder (it being understood that such Securities shall not be
deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Securities, 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 shall
not constitute a Default or an Event of Default under Section 6.1 hereof,
but, except as specified above, with respect to the remainder of this
Indenture, such Securities and the Subsidiary Guarantees shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.1 hereof
of the option applicable to this Section 8.3 hereof, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, Sections
6.1(3) (but only with respect to the Company's failure to observe or perform
the covenants, conditions and agreements of the Company under clause (iv) of
Section 5.1), 6.1(4), 6.1(7) and 6.1(8) hereof shall not constitute Events of
Default.
Section 8.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the Securities, cash in United
States dollars, non-callable Government Securities, or a combination thereof,
in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal of,
premium, if any, and interest, on the outstanding Securities on the stated
maturity or on the applicable redemption date, as the
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case may be, and the Company must specify whether the Securities are being
defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.2 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Indenture, there has
been a change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders of the outstanding Securities will not recognize income, gain or
loss for federal income tax purposes as a result of such Legal Defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance
had not occurred;
(c) in the case of an election under Section 8.3 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Securities will not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant Defeasance
had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit)
or insofar as Section 6.1(9) or 6.1(10) hereof is concerned, at any time in
the period ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(g) the Company shall deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Securities over the other creditors
of the Company, or with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others; and
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(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.5. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD
IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.5, the "TRUSTEE") pursuant to Section 8.4 hereof in respect of the
outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Securities of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company and the Subsidiary Guarantors shall pay and indemnify
the Trustee against any tax, fee or other charge imposed on or assessed
against the cash or non-callable Government Securities deposited pursuant to
Section 8.4 hereof or the principal and interest received in respect thereof
other than any such tax, fee or other charge which by law is for the account
of the Holders of the outstanding Securities.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities held
by it as provided in Section 8.4 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
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Section 8.6. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any Security and remaining unclaimed for two years
after such principal, premium, if any, or interest has become due and payable
shall be paid to the Company on its request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Security shall
thereafter, as a general creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect
to such trust money, and all liability of the Company as trustee thereof,
shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying
Agent, before being required to make any such repayment, may at the expense
of the Company cause to be published once, in the NEW YORK TIMES and THE WALL
STREET JOURNAL (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30
days from the date of such notification or publication, any unclaimed balance
of such money then remaining shall be repaid to the Company.
Section 8.7. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.2
or 8.3 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the obligations of the Company and the
Subsidiary Guarantors under this Indenture, the Securities and the Subsidiary
Guarantees shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.2 or 8.3 hereof, as the case may be; PROVIDED, HOWEVER,
that if the Company or any Subsidiary Guarantor makes any payment of
principal of, premium, if any, or interest on any Security following the
reinstatement of its obligations, the Company or such Subsidiary Guarantor
shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.1. WITHOUT CONSENT OF HOLDERS OF SECURITIES.
Notwithstanding Section 9.2 of this Indenture, the Company, the
Subsidiary Guarantors and the Trustee may amend or supplement this Indenture,
the Securities or the Subsidiary Guarantees without the consent of any Holder
of a Security:
(a) to cure any ambiguity, defect or inconsistency;
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(b) 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);
(c) to provide for the assumption of the Company's obligations to the
Holders of the Securities in the case of a merger or consolidation pursuant
to Article 5 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Securities or that does not adversely affect
the legal rights hereunder of any Holder of the Security;
(e) to add Guarantees with respect to the Securities or to secure the
Securities; or
(f) to comply with requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company and each of the Subsidiary Guarantors, as
the case may be, authorizing the execution of any such amended or
supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 7.2 hereof, the Trustee shall join with the Company and
the Subsidiary Guarantors in the execution of any amended or supplemental
indenture authorized or permitted by the terms of this Indenture and to make
any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such amended
or supplemental Indenture that affects its own rights, duties or immunities
under this Indenture or otherwise.
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Section 9.2. WITH CONSENT OF HOLDERS OF SECURITIES.
Except as provided below in this Section 9.2, the Company, the
Subsidiary Guarantors and the Trustee may amend or supplement this Indenture,
the Securities and the Subsidiary Guarantees with the consent of the Holders
of at least a majority in aggregate 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 the Securities),
and, subject to Sections 6.4 and 6.7 hereof, any existing Default or Event of
Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Securities) or compliance
with any provision of this Indenture, the Securities or the Subsidiary
Guarantees may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities (including, without
limitation, consents obtained in connection with a purchase of, or tender
offer or exchange offer for the Securities).
In addition, any amendment to the provisions of Article 10 of this
Indenture shall require the consent of the Holders of at least 66_% in
aggregate principal amount of the Securities then outstanding if such
amendment would adversely affect the rights of Holders of Securities;
provided that, no amendment may be made to the provisions of Article 10 of
this Indenture that adversely affects the rights of any holder of Senior Debt
then outstanding unless the holders of such Senior Debt (or any group or
representative thereof authorized to consent) consent to such change.
Subject to Sections 6.4 and 6.7 hereof, the Holders of a majority
in aggregate principal amount of the Securities then outstanding may waive
compliance in a particular instance by the Company or any Subsidiary
Guarantor with any provision of this Indenture, the Securities or the
Subsidiary Guarantees. However, without the consent of each Holder affected,
an amendment or waiver may not (with respect to any Securities held by a
non-consenting Holder):
(a) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Security or alter the provisions with respect to the redemption of the
Securities (except as provided above with respect to Sections 3.9, 4.10 and
4.13 hereof);
(c) reduce the rate of or change the time for payment of interest on
any Security;
(d) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Securities (except a rescission
of acceleration of the Securities by the Holders of at least a majority in
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principal amount of the Securities and a waiver of the payment default that
resulted from such acceleration);
(e) make any Security payable in money other than that stated in the
Securities;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Securities to receive
payments of principal or premium, if any, or interest on the Securities;
(g) make any change in the foregoing amendment and waiver provisions;
or
(h) except as provided under Section 11.4 or Article 8, release any
Subsidiary Guarantor from its obligations under its Subsidiary Guarantee or
make any change in a Subsidiary Guaranty that would adversely affect the
Holders.
Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company and each of the Subsidiary Guarantors, as
the case may be, authorizing the execution of any such amended or
supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Securities as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 7.2 hereof, the Trustee shall join with the Company and the
Subsidiary Guarantors in the execution of such amended or supplemental
indenture unless such amended or supplemental indenture affects the Trustee's
own rights, duties or immunities under this indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of
Securities under this Section 9.2 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Securities affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver.
Section 9.3. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Securities
shall be set forth in an amended or supplemental Indenture that complies with
the TIA as then in effect.
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Section 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Security is a continuing consent by the Holder
of a Security and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security,
even if notation of the consent is not made on any Security. However, any
such Holder of a Security or subsequent Holder of a Security may revoke the
consent as to its Security if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
Section 9.5. NOTATION ON OR EXCHANGE OF SECURITIES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Security thereafter authenticated. The Company
in exchange for all Securities may issue and the Trustee shall authenticate
new Securities that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Security
shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.6. TRUSTEE TO SIGN AMENDMENT, ETC.
The Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee. Neither the Company nor any Subsidiary Guarantor may sign an
amendment or supplemental Indenture until its respective Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.1) shall be fully
protected in relying upon, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture and that there has been compliance
with all conditions precedent.
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ARTICLE 10
SUBORDINATION
Section 10.1. AGREEMENT TO SUBORDINATE.
The Company and each Subsidiary Guarantor agree, and each Holder by
accepting a Security and the related Subsidiary Guarantee agrees, that (i)
the Indebtedness evidenced by (a) the Securities, including, but not limited
to, the payment of principal of, premium, if any, and interest on the
Securities, and any other payment Obligation of the Company in respect of the
Securities (including any obligation to repurchase the Securities) is
subordinated in right of payment, to the extent and in the manner provided in
this Article, to the prior payment in full in cash of all Senior Debt of the
Company (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and (b) the Subsidiary Guarantees and other
payment Obligations in respect of the Subsidiary Guarantees are subordinated
in right of payment, to the extent and in the manner provided in this
Article, to the prior payment in full in cash of all Guarantor Senior Debt of
each Subsidiary Guarantor and (ii) the subordination is for the benefit of
the Holders of Senior Debt and Guarantor Senior Debt.
Section 10.2. CERTAIN DEFINITIONS.
"BANKRUPTCY LAW" means title 11, U.S. Code or any similar Federal
or state law for the relief of debtors.
"GUARANTOR SENIOR DEBT" means any Indebtedness of a Subsidiary
Guarantor permitted to be incurred under the terms of this Indenture, unless
the instrument under which such Indebtedness is incurred expressly provides
that it is on a parity with or subordinated in right of payment to the
Subsidiary Guarantee of such Subsidiary Guarantor, including interest
accruing subsequent to the filing of, or which would have accrued but for the
filing of, a petition of bankruptcy, whether or not such interest is an
allowable claim in such bankruptcy proceeding. Notwithstanding anything to
the contrary in the foregoing sentence, Guarantor Senior Debt shall not
include (1) any liability for federal, state, local or other taxes owed or
owing by any Subsidiary Guarantor, (2) any obligation of a Subsidiary
Guarantor to the Company or to any other Restricted Subsidiary of the
Company, (3) any accounts payable or trade liabilities of a Subsidiary
Guarantor arising in the ordinary course of business (including instruments
evidencing such liabilities), (4) any Indebtedness of Subsidiary Guarantor
that is incurred in violation of this Indenture, (5) Indebtedness of a
Subsidiary Guarantor which, when incurred and without respect to any election
under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without recourse to
such Subsidiary Guarantor, and (6) Indebtedness evidenced by a Subsidiary
Guarantee.
"REPRESENTATIVE" means the indenture trustee or other
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trustee, agent or representative for any Senior Debt or Guarantor Senior
Debt, as the case may be.
"SENIOR DEBT" means (i) Indebtedness of the Company or any
Subsidiary of the Company under or in respect of any Credit Facility, whether
for principal, interest (including interest accruing after the filing of a
petition initiating any proceeding pursuant to any bankruptcy law, whether or
not the claim for such interest is allowed as a claim in such proceeding),
reimbursement obligations, fees, commissions, expenses, indemnities or other
amounts, and (ii) any other Indebtedness permitted under the terms of this
Indenture, unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to the Securities. Notwithstanding anything to the contrary in the
foregoing sentence, Senior Debt will not include (w) any liability for
federal, state, local or other taxes owed or owing by the Company, (x) any
Indebtedness of the Company to any of its Subsidiaries or other Affiliates,
(y) any trade payables or (z) any Indebtedness that is incurred in violation
of this Indenture (other than Indebtedness under (i) the Existing Credit
Facility or (ii) any other Credit Facility that is incurred on the basis of a
representation by the Company to the applicable lenders that it is permitted
to incur such Indebtedness under this Indenture).
A "distribution" may consist of cash, securities or other property,
by set-off or otherwise.
All Designated Senior Debt now or hereafter existing and all other
Obligations relating thereto shall not be deemed to have been paid in full
unless the holders or owners thereof shall have received payment in full in
cash (or other form of payment consented to by the holders of such Designated
Senior Debt) with respect to such Designated Senior Debt and all other
Obligations with respect thereto.
Section 10.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
(a) Upon any payment or distribution of property or securities to
creditors of the Company in a liquidation or dissolution of the Company or in
a bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property, or in an assignment for the benefit
of creditors or any marshalling of the Company's assets and liabilities:
(1) the holders of Senior Debt of the Company shall be entitled to
receive payment in full in cash of all Obligations in respect of such
Senior Debt (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Debt, whether or
not a claim for such interest would be allowed in such proceeding) before
the Holders of Securities shall be entitled to receive any payment with
respect to the Securities and related Obligations (except in each case that
Holders of Securities may receive securities that are
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subordinated at least to the same extent as the Securities to Senior
Debt and any securities issued in exchange for Senior Debt and payments
made from any defeasance trust created pursuant to Section 8.1 hereof
provided that the applicable deposit does not violate Article 8 or 10 of
this Indenture); and
(2) until all Obligations with respect to Senior Debt of the
Company (as provided in subsection (1) above) are paid in full in cash,
any payment or distribution to which the Holders of Securities and the
related Subsidiary Guarantees would be entitled shall be made to holders
of Senior Debt of the Company (except that Holders of Securities and the
related Subsidiary Guarantees may receive securities that are
subordinated at least to the same extent as the Securities to Senior
Debt and any securities issued in exchange for Senior Debt and payments
made from any defeasance trust created pursuant to Section 8.1 hereof
provided that the applicable deposit does not violate Article 8 or 10 of
this Indenture).
(b) Upon any payment or distribution of property or securities to
creditors of a Subsidiary Guarantor in a liquidation or dissolution of such
Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Subsidiary Guarantor or its
property, or in an assignment for the benefit of creditors or any marshalling of
such Subsidiary Guarantor's assets and liabilities:
(1) the holders of Guarantor Senior Debt of such Subsidiary
Guarantor shall be entitled to receive payment in full in cash of all
Obligations in respect of such Guarantor Senior Debt (including interest
after the commencement of any such proceeding at the rate specified in
the applicable Senior Debt, whether or not a claim for such interest
would be allowed in such proceeding) before the Holders of Securities
and the related Subsidiary Guarantees shall be entitled to receive any
payment or distribution with respect to the Subsidiary Guarantee made by
such Subsidiary Guarantor (except in each case that Holders of
Securities and the related Subsidiary Guarantees may receive securities
that are subordinated at least to the same extent as the Securities to
Senior Debt and any securities issued in exchange for Senior Debt and
payments made from any defeasance trust created pursuant to Section 8.1
hereof provided that the applicable deposit does not violate Article 8
or 10 of this Indenture); and
(2) until all Obligations with respect to Guarantor Senior Debt of
such Subsidiary Guarantor (as provided in subsection (1) above) are paid
in full in cash, any payment or distribution to which the Holders of
Securities and the related Subsidiary Guarantees would be entitled shall
be made to holders of Guarantor Senior Debt of such Subsidiary Guarantor
(except that Holders of Securities and the related
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Subsidiary Guarantees may receive securities that are subordinated at
least to the same extent as the Securities to Senior Debt and any
securities issued in exchange for Senior Debt and payments made from any
defeasance trust created pursuant to Section 8.1 hereof provided that
the applicable deposit does not violate Article 8 or 10 of this
Indenture).
Under the circumstances described in this Section 10.3, the
Company, any Subsidiary Guarantor or any receiver, trustee in bankruptcy,
liquidating trustee, agent or other similar person making any payment or
distribution of cash or other property or securities is authorized or
instructed to make any payment or distribution to which the Holders of the
Securities and the related Subsidiary Guarantees would otherwise be entitled
(other than securities that are subordinated at least to the same extent as
the Securities to Senior Debt and any securities issued in exchange for
Senior Debt and payments made from any defeasance trust referred to in the
second parenthetical clause of each of clauses (a)(1), (b)(1), (c)(1),
(a)(2), (b)(2) and (c)(2) above, which shall be delivered or paid to the
Holders of Securities as set forth in such clauses) directly to the holders
of the Senior Debt of the Company and the holders of Guarantor Senior Debt of
any Subsidiary Guarantor, as applicable, (PRO RATA to such holders on the
basis of the respective amounts of Senior Debt of the Company and Guarantor
Senior Debt of any Subsidiary Guarantor, as applicable, held by such holders)
or their Representatives, or to any trustee or trustees under any other
indenture pursuant to which any such Senior Debt or Guarantor Senior Debt, as
the case may be, may have been issued, as their respective interests appear,
to the extent necessary to pay all such Senior Debt or Guarantor Senior Debt,
as the case may be, in full, in cash or cash equivalents after giving effect
to any concurrent payment, distribution or provision therefor to or for the
holders of such Senior Debt or Guarantor Senior Debt, as the case may be.
To the extent any payment of or distribution in respect of Senior
Debt or Guarantor Senior Debt (whether by or on behalf of the Company or any
Subsidiary Guarantor, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside
or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then if such payment or
distribution is recovered by, or paid over to, such receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person, the Senior
Debt or Guarantor Senior Debt or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred. To the extent the obligation to repay any Senior Debt is
declared to be fraudulent, invalid or otherwise set aside under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then the obligation so declared fraudulent, invalid or otherwise set aside
(and all other amounts that would come due with respect thereto
96
had such obligation not been so affected) shall be deemed to be reinstated
and outstanding as Senior Debt for all purposes hereof as if such
declaration, invalidity or setting aside had not occurred.
Section 10.4. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company and the Subsidiary Guarantors may not make any payment
(whether by redemption, purchase, retirements, defeasance or otherwise) upon
or in respect of the Securities and the related Subsidiary Guarantees (other
than securities that are subordinated at least to the same extent as the
Securities to Senior Debt and any securities issued in exchange for Senior
Debt and payments and other distributions made from any defeasance trust
created pursuant to Section 8.1 hereof if the applicable deposit does not
violate Article 8 or 10 of this Indenture) until all principal and other
Obligations with respect to the Senior Debt of the Company have been paid in
full if:
(i) a default in the payment of any principal of, premium, if
any, or interest on Designated Senior Debt occurs; or
(ii) any other default occurs and is continuing with respect to
Designated Senior Debt that permits, or with the giving of notice or
passage of time or both (unless cured or waived) would permit, holders of
the Designated Senior Debt as to which such default relates to accelerate
its maturity and the Trustee receives a notice of the default (a "PAYMENT
BLOCKAGE NOTICE") from the Company or the holders of any Designated Senior
Debt. If the Trustee receives any such Payment Blockage Notice, no
subsequent Payment Blockage Notice shall be effective for purposes of this
Section unless and until 360 days shall have elapsed since the date of
commencement of the payment blockage period resulting from the immediately
prior Payment Blockage Notice. No nonpayment default in respect of any
Designated Senior Debt that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice unless such
default shall have been cured or waived for a period of no less than 90
days.
The Company shall resume payments on and distributions in respect
of the Securities and any Subsidiary Guarantor shall resume making payments
and distributions pursuant to the Subsidiary Guarantees upon:
(1) in the case of a default referred to in Section 10.4(i) hereof
the date upon which the default is cured or waived, or
(2) in the case of a default referred to in Section 10.4(ii) hereof,
the earliest of (1) the date on which such nonpayment default is cured or
waived or (2) 179 days after the date on which the applicable Payment
Blockage Notice is
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received unless (A) the maturity of any Designated Senior Debt has been
accelerated or (B) a Default or Event of Default under Section 6.1(9) OR
(10) has occurred and is continuing,
if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
Section 10.5. ACCELERATION OF SECURITIES.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt and
Guarantor Senior Debt of the acceleration.
Section 10.6. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment or
distribution of or in respect of any Obligations with respect to the
Securities or the Subsidiary Guarantees at a time when such payment or
distribution is prohibited by Section 10.3 or Section 10.4 hereof, such
payment or distribution shall be held by the Trustee (if the Trustee has
actual knowledge that such payment or distribution is prohibited by Section
10.3 or 10.4) or such Holder, in trust for the benefit of, and shall be paid
forthwith over and delivered to, the holders of Senior Debt or Guarantor
Senior Debt, as the case may be, as their interests may appear or their
Representative under the indenture or other agreement (if any) pursuant to
which such Senior Debt or Guarantor Senior Debt, as the case may be, may have
been issued, as their respective interests may appear, for application to the
payment of all Obligations with respect to Senior Debt or Guarantor Senior
Debt, as the case may be, remaining unpaid to the extent necessary to pay
such Obligations in full in accordance with their terms, after giving effect
to any concurrent payment or distribution to or for the holders of Senior
Debt or Guarantor Senior Debt, as the case may be.
With respect to the holders of Senior Debt and Guarantor Senior
Debt, the Trustee undertakes to perform only such obligations on the part of
the Trustee as are specifically set forth in this Article 10, and no implied
covenants or obligations with respect to the holders of Senior Debt or
Guarantor Senior Debt, as the case may be shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Debt or Guarantor Senior Debt, and, except as
provided in Section 10.12, shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders of Securities
or the Company, the Subsidiary Guarantors or any other Person money or assets
to which any holders of Senior Debt and Guarantor Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
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Section 10.7. NOTICE BY COMPANY.
The Company and the Subsidiary Guarantors shall promptly notify the
Trustee and the Paying Agent of any facts known to the Company or any
Subsidiary Guarantor that would cause a payment of any Obligations with
respect to the Securities or the related Subsidiary Guarantees to violate
this Article, but failure to give such notice shall not affect the
subordination of the Securities and the related Subsidiary Guarantees to the
Senior Debt and Guarantor Senior Debt as provided in this Article.
Section 10.8. SUBROGATION.
After all Senior Debt and Guarantor Senior Debt is paid in full and
until the Securities are paid in full, Holders of Securities and the related
Subsidiary Guarantees shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Securities and the Subsidiary Guarantees) to
the rights of holders of Senior Debt or Guarantor Senior Debt, as the case
may be, to receive distributions and payments applicable to Senior Debt or
Guarantor Senior Debt, as the case may be, to the extent that distributions
and payments otherwise payable to the Holders of Securities and the related
Subsidiary Guarantees have been applied to the payment of Senior Debt or
Guarantor Senior Debt, as the case may be. A payment or distribution made
under this Article to holders of Senior Debt or Guarantor Senior Debt, as the
case may be, that otherwise would have been made to Holders of Securities and
the related Subsidiary Guarantees is not, as between the Company and Holders
of Securities, a payment by the Company on the Securities or, as between a
Subsidiary Guarantor and Holders of the related Subsidiary Guarantee, a
payment by such Subsidiary Guarantor on such Subsidiary Guarantee.
Section 10.9. RELATIVE RIGHTS.
This Article defines the relative rights of Holders of Securities
and the related Subsidiary Guarantees and holders of Senior Debt and
Guarantor Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company or the Subsidiary Guarantors,
as the case may be, and Holders of Securities, the obligation of the
Company and the Subsidiary Guarantors, which is absolute and
unconditional, to pay principal of and interest on the Securities in
accordance with their terms and, in the case of the Subsidiary
Guarantors, the terms of the Subsidiary Guarantees;
(2) affect the relative rights of Holders of Securities and the
related Subsidiary Guarantees and creditors of the Company other than
their rights in relation to holders of Senior Debt or Guarantor Senior
Debt, as the case may be; or
99
(3) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt or Guarantor Senior Debt, as
the case may be, to receive distributions and payments otherwise payable
to Holders of Securities and the related Subsidiary Guarantees.
If the Company fails because of this Article to pay principal of or
interest on a Security on the due date, the failure is still a Default or Event
of Default.
Section 10.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY OR THE
SUBSIDIARY GUARANTORS.
No right of any present or future holders of any Senior Debt or
Guarantor Senior Debt, as the case may be, to enforce subordination as
provided in this Article 10 will at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or any
Subsidiary Guarantor or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company or any Subsidiary
Guarantor with the terms of this Indenture, regardless of any knowledge
thereof that any such holder of Senior Debt or Guarantor Senior Debt, as the
case may be, may have or otherwise be charged with. The provisions of this
Article Ten are intended to be for the benefit of, and shall be enforceable
directly by, the holders of Senior Debt and Guarantor Senior Debt.
Section 10.11. PAYMENT, DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a payment or distribution is to be made or a notice given
to holders of Senior Debt or Guarantor Senior Debt, as the case may be, the
distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets or securities of the
Company or any Subsidiary Guarantor referred to in this Article 10, the
Trustee and the Holders of Securities and the related Subsidiary Guarantees
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such Representative or of
the liquidating trustee or agent or other Person making any payment or
distribution to the Trustee or to the Holders of Securities and the related
Subsidiary Guarantees for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt,
Guarantor Senior Debt and other Indebtedness of the Company or any Subsidiary
Guarantor, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article 10.
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Section 10.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge
of the existence of any facts that would prohibit the making of any payment
or distribution by the Trustee, and the Trustee and the Paying Agent may
continue to make payments on the Securities and the Subsidiary Guarantees,
unless the Trustee shall have received at its Corporate Trust Office at least
one Business Day prior to the date of such payment written notice of facts
that would cause the payment of any Obligations with respect to the
Securities or Subsidiary Guarantees to violate this Article, which notice
shall specifically refer to Section 10.3 or 10.4 hereof. Only the Company or
a Representative may give the notice. Nothing in this Article 10 shall
impair the claims of, or payments to, the Trustee under or pursuant to
Section 7.7 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt and Guarantor Senior Debt with the same rights it would have if it were
not Trustee. Any Agent may do the same with like rights.
Section 10.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as the Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof
of claim or proof of debt in the form required in any proceeding referred to
in Section 6.9 hereof at least 30 days before the expiration of the time to
file such claim, each lender under the Existing Credit Facility is hereby
authorized to file an appropriate claim for and on behalf of the Holders of
the Securities and the related Subsidiary Guarantees.
Section 10.14. AMENDMENTS.
No amendment may be made to the provisions of or the definitions of
any terms appearing in this Article 10, or to the provisions of Section 6.2
relating to the Designated Senior Debt, that adversely affects the rights of
any holder of Senior Debt or Guarantor Senior Debt, as the case may be, then
outstanding unless the holders of such Senior Debt or Guarantor Senior Debt,
as the case may be, (or any group or Representative authorized to give a
consent) consent to such change.
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Section 10.15. NO WAIVER OF SUBORDINATION PROVISIONS.
Without in any way limiting the generality of Section 10.9 of this
Indenture, the holders of Senior Debt or Guarantor Senior Debt, as the case
may be, may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders, without incurring responsibility to the
Holders and without impairing or releasing the subordination provided in this
Article Ten or the obligations hereunder of the Holders to the holders of
Senior Debt or Guarantor Senior Debt, as the case may be, do any one or more
of the following: (a) change the manner, place or terms of payment or extend
the time of payment of, or renew or alter, Senior Debt or Guarantor Senior
Debt, as the case may be, or any instrument evidencing the same or any
agreement under which Senior Debt or Guarantor Senior Debt, as the case may
be, is outstanding or secured; (b) sell, exchange, release or otherwise deal
with any property pledged, mortgaged or otherwise securing Senior Debt or
Guarantor Senior Debt, as the case may be; (c) release any Person liable in
any manner for the collection of Senior Debt or Guarantor Senior Debt, as the
case may be; and (d) exercise or refrain from exercising any rights against
the Company and each Subsidiary Guarantor and any other Person.
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ARTICLE 11
THE SUBSIDIARY GUARANTEES
Section 11.1. THE SUBSIDIARY GUARANTEES.
103
Each of the Subsidiary Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Security authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the
Securities or the obligations of the Company hereunder or thereunder, that:
(a) the principal of and premium and interest, on the Securities shall be
promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and
interest on premium and interest, on the Securities, if any, if lawful, and
all other obligations of the Company to the Holders or the Trustee hereunder
or thereunder shall be promptly paid in full or performed, all in accordance
with the terms hereof and thereof; and (b) in case of any extension of time
of payment or renewal of any Securities or any of such other obligations,
that the same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed or any performance so guaranteed for whatever reason,
the Subsidiary Guarantors shall be jointly and severally obligated to pay the
same immediately. The Subsidiary Guarantors hereby agree that their
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities or this Indenture, the absence
of any action to enforce the same, any waiver or consent by any Holder with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of
a guarantor. Each of the Subsidiary Guarantors hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, ay right to require a proceeding
first against the Company, protest, notice and all demands whatsoever and
covenant that this Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Securities and this
Indenture. If any Holder or the Trustee is required by any court or
otherwise to return to the Company or the Subsidiary Guarantors, or any
Custodian, Trustee, liquidator or other similar official acting in relation
to either the Company or the Subsidiary Guarantors, any amount paid by either
to the Trustee or such Holder, this Subsidiary Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
of the Subsidiary Guarantors agrees that it shall not be entitled to any
right of subrogation in relation to the Holders of Securities in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each of the Subsidiary Guarantors further agrees that, as
between the Subsidiary Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 for the purposes of this
Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby and (y) in the event of any declaration of
104
acceleration of such obligations as provided in Article 6, such obligations
(whether or not due and payable) shall forthwith become due and payable by
the Subsidiary Guarantors for the purpose of this Subsidiary Guarantee. The
Subsidiary Guarantors shall have the right to seek contribution from any
Subsidiary Guarantor not paying so long as the exercise of such right does
not impair the rights of the Holders under the Subsidiary Guarantees.
Section 11.2. SUBORDINATION OF SUBSIDIARY GUARANTEES.
The obligations of each of the Subsidiary Guarantors under its
Subsidiary Guarantee pursuant to this Article 11 shall be junior and
subordinated to the Guarantor Senior Debt of the Subsidiary Guarantor
pursuant to Article 10 hereof. For the purposes of the foregoing sentence,
the Trustee and the Holders shall have the right to receive and/or retain
payments or distributions by or on behalf of any of the Subsidiary Guarantors
only at such times as they may receive and/or retain payments in respect of
the Securities pursuant to this Indenture, including Article 10 hereof.
Section 11.3. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON
CERTAIN TERMS.
No Subsidiary Guarantor may consolidate with or merge with or into
(whether or not such Subsidiary Guarantor is the Surviving Person), another
Person other than the Company or another Subsidiary Guarantor, whether or not
affiliated with such Subsidiary Guarantor, unless:
(a) subject to the provisions of Section 11.4 hereof, the Person
formed by or surviving any such consolidation or merger (if other than such
Subsidiary Guarantor) assumes all the obligations of such Subsidiary
Guarantor pursuant to a supplemental indenture in form reasonably
satisfactory to the Trustee in respect of the Securities, this Indenture
and such Subsidiary Guarantor's Guarantee;
(b) immediately after giving effect to such transaction, no Default
or Event of Default exists; and
(c) such transaction does not violate any of Sections 4.3, 4.7, 4.8,
4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18 and 4.19.
Notwithstanding the foregoing, none of the Subsidiary Guarantors shall be
permitted to consolidate with or merge with or into (whether or not such
Subsidiary Guarantor is the surviving Person), another corporation, Person or
entity pursuant to the preceding sentence if such consolidation or merger
would not be permitted by Section 5.1 hereof.
In case of any such consolidation or merger and upon the assumption
by the successor corporation, by supplemental indenture, executed and
delivered to the Trustee and satisfactory
105
in form to the Trustee, of the Subsidiary Guarantee endorsed upon the
Securities and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by such Subsidiary Guarantor,
such successor corporation shall succeed to and be substituted for such
Subsidiary Guarantor with the same effect as if it had been named herein as a
Subsidiary Guarantor. Such successor corporation thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be endorsed upon all of the
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee. All the Subsidiary Guarantees so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Subsidiary Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Subsidiary
Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, nothing contained
in this Indenture or in any of the Securities shall prevent any consolidation
or merger of any Subsidiary Guarantor with or into the Company or another
Subsidiary Guarantor, or shall prevent any sale or conveyance of the property
of any Subsidiary Guarantor as an entirety or substantially as an entirety to
the Company or any Subsidiary Guarantor.
Section 11.4. RELEASES OF SUBSIDIARY GUARANTEES.
In the event of a sale or other disposition of all or substantially
all of the assets of any Subsidiary Guarantor or a sale or other disposition
of all of the capital stock of any Subsidiary Guarantor, to any corporation
or other Person (including an Unrestricted Subsidiary) by way of merger,
consolidation, or otherwise, in a transaction that does not violate any of
the covenants of this Indenture, then such Subsidiary Guarantor (in the event
of a sale or other disposition, by way of such merger, consolidation or
otherwise, of all the capital stock of such Subsidiary Guarantor) shall be
released and relieved of any obligations under its Subsidiary Guarantee and
such acquiring corporation or other Person (in the event of a sale or other
disposition of all or substantially all of the assets of such Subsidiary
Guarantor), if other than a Subsidiary Guarantor, shall have no obligation to
assume or otherwise become liable under such Subsidiary Guarantee; PROVIDED
that the Net Proceeds of such sale or other disposition are applied in
accordance with Section 4.10 hereof. Upon delivery by the Company to the
Trustee of an Officers' Certificate and an Opinion of Counsel to the effect
that such sale or other disposition was made by the Company in accordance
with the provisions of this Indenture, including without limitation Section
4.10, the Trustee shall execute any documents reasonably required in order to
evidence the release of any Subsidiary Guarantor from its obligations under
its Subsidiary Guarantee.
Any Subsidiary Guarantor not released from its obligations under
its Subsidiary Guarantee shall remain liable for the full amount of principal
of and interest on the
106
Securities and for the other obligations of such Subsidiary Guarantor under
this Indenture as provided in this Article 11.
Any Subsidiary Guarantor that is designated an Unrestricted
Subsidiary in accordance with the terms of this Indenture shall, upon such
designation, be released from and relieved of its obligations under its
Subsidiary Guarantee and any Unrestricted Subsidiary whose obligation as such
is revoked and any newly created or newly acquired Subsidiary that is or
becomes a Restricted Subsidiary shall be required to execute a Subsidiary
Guarantee in accordance with the terms of this Indenture.
Section 11.5. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY.
For purposes hereof, each Subsidiary Guarantor's liability shall be
that amount from time to time equal to the aggregate liability of such
Subsidiary Guarantor thereunder, but shall be limited to the lesser of (i)
the aggregate amount of the Obligations of the Company under the Securities
and this Indenture and (ii) the amount, if any, which would not have (A)
rendered such Subsidiary Guarantor "INSOLVENT" (as such term is defined in
the federal Bankruptcy Law and in the Debtor and Creditor Law of the State of
New York) or (B) left it with unreasonably small capital at the time its
Subsidiary Guarantee of the Securities was entered into, after giving effect
to the incurrence of existing Indebtedness immediately prior to such time;
PROVIDED that, it shall be a presumption in any lawsuit or other proceeding
in which such Subsidiary Guarantor is a party that the amount guaranteed
pursuant to its Subsidiary Guarantee is the amount set forth in clause (i)
above unless any creditor, or representative of creditors of such Subsidiary
Guarantor, or debtor in possession or trustee in bankruptcy of such
Subsidiary Guarantor, otherwise proves in such a lawsuit that the aggregate
liability of such Subsidiary Guarantor is limited to the amount set forth in
clause (ii). In making any determination as to the solvency or sufficiency
of capital of a Subsidiary Guarantor in accordance with the previous
sentence, the right of such Subsidiary Guarantor to contribution from other
Subsidiary Guarantors and any other rights such Subsidiary Guarantor may
have, contractual or otherwise, shall be taken into account.
Section 11.6. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"TRUSTEE" as used in Article 10 and this Article 11 shall in such case
(unless the context shall otherwise require) be construed as extending to and
including such Paying Agent within its meaning as fully and for all intents
and purposes as if such Paying Agent were named in Article 10 and this
Article 11 in place of the Trustee.
107
ARTICLE 12
MISCELLANEOUS
Section 12.1. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties shall
control. If any provisions of this Indenture modifies or excludes any
provision of the TIA that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
Section 12.2. NOTICES.
Any notice or communication by the Company or the Subsidiary
Guarantors or the Trustee to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telecopier or overnight air courier guaranteeing
next day delivery, to the others' address:
If to the Company or any Subsidiary Guarantor:
Continental Resources, Inc.
000 Xxxxx Xxxxxxxxxxxx, 0xx Xxxxx
X.X. Xxx 0000
Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx Xxxx and Xxxxx Xxxxxxx
With a copies to:
McAfee & Xxxx A Professional Corporation
Tenth Floor, Two Leadership Square
000 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxx Xxxx
If to the Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Administration
Ref: Continental Resources, Inc.
The Company or any Subsidiary Guarantor or the Trustee, by notice
to the others may designate additional or different addresses for subsequent
notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time
108
delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when receipt acknowledged,
if by telecopy; and the next Business Day after timely delivery to the
courier, if sent by overnight air courier guaranteeing next day delivery
(except that a notice of change of address and any notice to the Trustee
shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on
the register kept by the Registrar. Any notice or communication shall also
be so mailed to any Person described in TIA Section 313(c), to the extent
required by the TIA. Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other
Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company or any Subsidiary Guarantor mails a notice or
communication to Holders, it shall mail a copy to the Trustee and each Agent
at the same time.
Section 12.3. COMMUNICATION BY HOLDERS OF SECURITIES WITH OTHER
HOLDERS OF SECURITIES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities.
The Company, the Subsidiary Guarantors, the Trustee, the Registrar and anyone
else shall have the protection of TIA Section 312(c).
Section 12.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or any Subsidiary
Guarantor to the Trustee to take any action under this Indenture, the Company
or such Subsidiary Guarantor, as the case may be, shall furnish to the
Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.5 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, 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 (which shall include the statements set forth
in Section 12.5 hereof) stating that, in the opinion of such counsel, all
such conditions
109
precedent have been complied with.
Section 12.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply with
the provisions of TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(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 Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with; PROVIDED, that with
respect to matters of fact an Opinion of Counsel may rely on an Officer's
Certificate and/or certificates of public officials.
Section 12.6. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.7. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company or any Subsidiary, as such, shall have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Securities, by accepting a Security, waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Securities. Such waiver may not be
effective to waive liabilities under the federal securities laws and it is
the view of the Commission that such a waiver is against public policy.
110
Section 12.8. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS INDENTURE, THE SECURITIES AND THE SUBSIDIARY GUARANTEES.
Section 12.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or their respective Subsidiaries or of
any other Person. Any such indenture, loan or debt agreement may not be used
to interpret this Indenture and the Subsidiary Guarantees.
Section 12.10. SUCCESSORS.
All agreements of the Company and each Subsidiary Guarantor in this
Indenture, the Securities and the Subsidiary Guarantees shall bind its
respective successors. All agreements of the Trustee in this Indenture shall
bind its successors.
Section 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 12.12. COUNTERPART 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.
Section 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
SIGNATURES
Dated as of
July 24, 1998
CONTINENTAL RESOURCES, INC.
Attest: By: /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
/s/ XXXXXXXXX XXXXXXX Title: Senior Vice President,
General Counsel and Secretary
CONTINENTAL CRUDE CO.
Attest: By: /s/ XXXX XXXXX
Name: Xxxx Xxxxx
/s/ XXXXX XXXXXX Title: President
CONTINENTAL GAS, INC.
Attest: By: /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
/s/ XXXXXXXXX XXXXXXX Title: President
UNITED STATES TRUST COMPANY OF NEW YORK
Attest: By: /s/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
/s/ X. XXXXXXXXXXXX Title: Vice President
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
SERIES A NOTE
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK,
NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR 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.
THIS SECURITY IS SUBORDINATED TO SENIOR INDEBTEDNESS, AS DEFINED IN
THE INDENTURE (AS DEFINED HEREIN), AND THE OBLIGATIONS OF EACH SUBSIDIARY
GUARANTOR UNDER THE SUBSIDIARY GUARANTEE CONTAINED IN THE INDENTURE ARE
SUBORDINATED TO GUARANTOR SENIOR INDEBTEDNESS, AS DEFINED IN THE INDENTURE,
OF SUCH SUBSIDIARY GUARANTOR.
[Restricted Securities Legend]
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 OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH 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
A-1
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 "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS AN INSTITUTIONAL 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 $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, 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.
[Regulation S Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT 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") WHICH 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 "ACCREDITED INVESTOR"
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT THAT IS AN INSTITUTIONAL 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, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION
WITH ANY DISTRIBUTION IN VIOLATION OF THE
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SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, 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.
A-3
CONTINENTAL RESOURCES, INC.
10 1/4% Senior Subordinated Notes due 2008
No. 1 $150,000,000
CUSIP Number: 000000XX0
Continental Resources, Inc., an Oklahoma corporation, promises to
pay to Cede & Co., or registered assigns, the principal sum of One Hundred
Fifty Million Dollars on August 1, 2008.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Additional provisions of this Security are set forth on the other
side of this Security.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers and a
facsimile of its corporate seal to be affixed hereto and imprinted hereon.
Dated: ____________, 1998
CONTINENTAL RESOURCES, INC.
By ______________________________________
Name:
Title:
By ______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee, certifies that this is
one of the Securities referred to in the
within-mentioned Indenture:
By _____________________________________
Authorized Signatory
Dated: ____________, 1998
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(Back of Security)
10 1/4% Senior Subordinated Notes due 2008
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Continental Resources, Inc., an Oklahoma corporation
(the "COMPANY"), promises to pay interest on the principal amount of this
Security at the rate of 10 1/4% per annum, which interest shall be payable in
cash semiannually in arrears on each February 1 and August 1, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"INTEREST PAYMENT DATE"); PROVIDED that the first Interest Payment Date shall
be February 1, 1999. Interest on the Securities will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of original issuance. Interest will be computed on the basis
of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. On each Interest Payment Date the Company
will pay interest to the Person who is the Holder of record of this Security
as of the close of business on the January 15 or July 15 immediately
preceding such Interest Payment Date, even if this Security is cancelled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
Principal, premium, if any, and interest on this Security will be payable at
the office or agency of the Company maintained for such purpose within The
City and State of New York or, in the event the Securities do not remain in
book-entry form, at the option of the Company, payment of interest may be
made by check mailed to the Holder of this Security at its address set forth
in the register of Holders of Securities; PROVIDED that all payments with
respect to the Global Securities and Definitive Securities having an
aggregate principal amount of $5.0 million or more the Holders of which have
given wire transfer instructions to the Company at least 10 Business Days
prior to the applicable payment date will be required to be made by wire
transfer of immediately available funds to the accounts specified by the
Holders thereof. Such payment shall be in such coin or currency of the
United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, United States Trust
Company of New York, the Trustee under the Indenture, will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company or any Subsidiary Guarantor or any
other of the Company's Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Securities under an Indenture
dated as of July 24, 1998 ("INDENTURE") among
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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, as amended
(15 U.S. Code Sections 77aaa-77bbbb). The Securities are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Securities are general unsecured obligations of
the Company equal in an aggregate principal amount to $150,000,000 and will
mature on August 1, 2008.
The Securities are general unsecured senior subordinated obligations
of the Company limited to $150,000,000 million aggregate principal amount
(subject to Section 2.7 of the Indenture). The aggregate principal amount of
notes which may be authenticated and delivered under the Indenture, including
the Securities, is limited to $300.0 million (subject to Section 2.7 of the
Indenture). This Security is one of the Initial Securities referred to in
the Indenture. The Securities include the Initial Securities and any
Exchange Securities issued in exchange for the Initial Securities pursuant to
the Indenture and the Registration Rights Agreement. The Initial Securities
and the Exchange Securities are treated as a single class of securities under
the Indenture. The Indenture imposes certain limitations on the incurrence
of Indebtedness by the Company and its Restricted Subsidiaries, the payment
of dividends and other distributions on the Capital Stock of the Company and
its Restricted Subsidiaries, the purchase or redemption of Capital Stock of
the Company and Capital Stock of such Restricted Subsidiaries, certain
purchases or redemptions of Subordinated Indebtedness, the sale or transfer
of assets and Capital Stock of Restricted Subsidiaries, the issuance or sale
of Capital Stock of Restricted Subsidiaries, the Investments of the Company
and its Subsidiaries 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.
A-6
5. OPTIONAL REDEMPTION.
(a) The Securities are not redeemable at the Company's option prior
to August 1, 2003. From and after August 1, 2003, the Securities will be
subject to redemption at the option of the Company, in whole or in part, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below PLUS accrued
and unpaid interest thereon to the applicable redemption date, if redeemed
during the twelve-month period beginning on August 1 of the years indicated
below:
Percentage of
Year Principal Amount
---- ----------------
2003....................................105.125%
2004....................................103.417%
2005....................................101.708%
2006 and thereafter.....................100.000%
(b) Notwithstanding the provisions of clause (a) of this Paragraph 5,
prior to August 1, 2001 the Company may, at its option, on any one or more
occasions, redeem up to 35% of the original aggregate principal amount of
Securities at a redemption price equal to 110.250% of the principal amount
thereof, plus accrued and unpaid interest, if any, thereon to the redemption
date, with the net proceeds of sales of public common stock of the Company;
PROVIDED that at least 65% of the original aggregate principal amount of
Securities must remain outstanding immediately after the occurrence of such
redemption; and PROVIDED, further, that any such redemption shall occur
within 60 days after the date of the closing of the related sale of such
common stock.
(c) Notwithstanding the provisions of clause (a) of this Paragraph 5,
upon the occurrence of a Change of Control at any time on or prior to August 1,
2003, the Company may, at its option, redeem in whole but not in part, the
Securities at a redemption price equal to 100% of the principal amount
thereof, plus the Applicable Premium as of, and accrued but unpaid interest,
if any, to, the date of redemption (subject to the right of Holders of record
on the relevant record date to receive interest due on the relevant interest
payment date) provided that such redemption shall be made no more than 90 days
after the occurrence of a Change of Control. The Company shall notify the
Trustee and, by mail, the Holders of the Securities of its decision to redeem
the Securities pursuant to this Paragraph 5(c) within 30 days of the
occurrence of a Change of Control.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect
to the Securities.
X-0
0. XXXXXXXXXX AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, if the Company does
not redeem the Securities pursuant to paragraph 5(c), each Holder of
Securities shall 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 pursuant to the offer described below (the "Change of Control
Offer") at an offer price in cash equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest, if any, thereon to the date
of purchase (the "Change of Control Payment"). The right of the Holders of
the Securities to require the Company to repurchase such Securities upon a
Change of Control may not be waived by the Trustee without the approval of
the Holders of the Securities required by Section 9.2 of the Indenture.
Within 30 days following any Change of Control, the Company will mail a
notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Securities
pursuant to the procedures required by the Indenture and described in such
notice. The Change of Control Payment shall be made on a business day not
less than 30 days nor more than 60 days after such notice is mailed. The
Company and each Subsidiary Guarantor will comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable
in connection with the repurchase of the Securities as a result of a Change
of Control.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales permitted by the Indenture, when the aggregate amount of Excess
Proceeds exceeds $15 million, the Company shall make an Asset Sale Offer to
purchase the maximum principal amount of Securities and any other Pari Passu
Indebtedness to which the Asset Sale Offer applies that may be purchased out
of the Excess Proceeds, at an offer price in cash in an amount equal to, in
the case of the Securities, 100% of the principal amount thereof, plus
accrued and unpaid interest thereon to the date of purchase or, in the case
of any Pari Passu Indebtedness, 100% of the principal amount thereof (or with
respect to discount Pari Passu Indebtedness, the accreted value thereof) on
the date of purchase, in each case, in accordance with the procedures set
forth in Section 3.9 of the Indenture or the agreements governing the Pari
Passu Indebtedness, as applicable. To the extent that the aggregate
principal amount (or accreted value, as the case may be) of Securities, and
Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the sum of (i) the aggregate principal amount
of Securities surrendered by Holders thereof and (ii) the aggregate principal
amount or accreted value, as the case may be, of Pari Passu Indebtedness
surrendered by holders or lenders thereof exceeds the amount of Excess
Proceeds, the Trustee and the trustee or other lender representative for the
Pari Passu Indebtedness shall select the Securities and the other Pari Passu
Indebtedness to be purchased on a pro rata basis, based on the aggregate
principal amount (or accreted value, as applicable) thereof surrendered in
such Asset
A-8
Sale Offer. Upon completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Securities are to be redeemed at its registered address.
Securities in denominations larger than $1,000 may be redeemed in part but
only in integral multiples of $1,000, unless all of the Securities held by a
Holder are to be redeemed. On and after the redemption date interest ceases
to accrue on the aggregate principal amount of the Securities called for
redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities may be issued
initially in the form of one or more fully registered Global Securities. The
Securities may also be issued in registered form without coupons in minimum
denominations of $1,000 and integral multiples of $1,000. The transfer of
Securities may be registered and Securities may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and
the Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Security or portion of a Security selected for redemption,
except for the unredeemed portion of any Security being redeemed in part.
Also, it need not exchange or register the transfer of any Security for a
period of 15 days before a selection of Securities to be redeemed or during
the period between a record date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Security may
be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Securities may be amended or supplemented
with the consent of the Holders of at least a majority in aggregate principal
amount of the Securities then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or the tender offer or
exchange offer for, such Securities), and any existing Default or Event of
Default under, or compliance with any provision of the Indenture or the
Securities may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities. Without the consent of
any Holder of a Security, the Indenture or the Securities may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Securities in addition to or in place of certificated
Securities, to provide for the assumption of the Company's obligations to
Holders of the Securities in case of a merger or consolidation, to make any
change that would provide any additional rights or benefits to the Holders of
the Securities or that does not adversely affect the legal rights under the
Indenture of any such Holder, to add guarantees with respect to the
Securities or to secure the Securities or to comply with the requirements of
the Commission in order to effect
A-9
or maintain the qualification of the Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 consecutive days in the payment when due of interest on the
Securities (whether or not prohibited by the provisions of Article 10 of the
Indenture); (ii) default in payment when due of the principal of or premium,
if any, on the Securities (whether or not prohibited by the provisions of
Article 10 of the Indenture); (iii) failure by the Company or any Subsidiary
Guarantor to comply with the provisions of Article 5 of the Indenture; (iv)
failure by the Company for 30 consecutive days after notice from the Trustee
or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding to comply with the provisions of Sections 4.3,
4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18 and 4.19 of the
Indenture; (v) failure by the Company for 60 consecutive days after notice
from the Trustee or the Holders of at least 25% in aggregate principal amount
of the Securities then outstanding to comply with any of its other agreements
or covenants in, or provisions of, this Security or in the Indenture; (vi)
except as permitted by the Indenture, any Subsidiary Guarantee shall be held
in any judicial proceeding to be unenforceable or invalid or shall cease for
any reason to be in full force and effect or a Subsidiary Guarantor or any
Person acting on behalf of a Subsidiary Guarantor, shall deny or disaffirm
such Subsidiary Guarantor's obligations under its Subsidiary Guarantee; (vii)
default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any Restricted Subsidiary whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture, which default (a) is caused by a failure to pay principal of such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (b) results
in the acceleration of such Indebtedness prio to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there is then
existing a Payment Default or the maturity of which has been so accelerated,
aggregates $10 million or more; (viii) a final non-appealable judgment or
order or final non-appealable judgments or orders are rendered against the
Company or any Restricted Subsidiary that remain unpaid or discharged for a
period of 60 days and that require the payment in money, either individually
or in an aggregate amount, that is more than $10 million; and (ix) certain
events of bankruptcy or insolvency with respect to the Company or any
Restricted Subsidiary. If any Event of Default (other than an Event of
Default described in clause (ix) above) occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the then
outstanding Securities may declare all the Securities to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency with respect
to the Company or any Restricted Subsidiary, all outstanding Securities will
become due and payable without further action or notice. Holders of the
A-10
Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. Subject to certain limitations, Holders of a majority in
aggregate principal amount of the then outstanding Securities may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Securities notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may on behalf of the
Holders of all of the Securities waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default
or Event of Default in the payment of interest or premium on, or the
principal of, the Securities. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required, within 5 Business days after becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.
13. SUBORDINATION. The Securities are subordinated to Senior Debt
of the Company and the Subsidiary Guarantees are subordinated to Guarantor
Senior Debt of the Subsidiary Guarantors. To the extent provided in the
Indenture, Senior Debt must be paid before the Securities may be paid and
Guarantor Senior Debt of a Subsidiary Guarantor must be paid before a
Subsidiary Guarantor may pay under its Subsidiary Guarantee. The Company
agrees, and each Holder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities, including, but not limited to, the payment of
principal of, premium, if any, and interest on the Securities, and any other
payment Obligation of the Company in respect of the Securities and the
obligations of each Subsidiary Guarantor under its Subsidiary Guarantee are
subordinated in right of payment, to the extent and in the manner provided in
the Indenture, to the prior payment in full in cash of all Senior Debt of the
Company and, in the case of a Subsidiary Guarantee, all Guarantor Senior Debt
of such Subsidiary Guarantor (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed) and authorizes the
Trustee to give effect and appoints the Trustee as attorney-in-fact for such
purpose.
14. TRUSTEE DEALINGS WITH COMPANY. The Indenture contains certain
limitations on the rights of the Trustee, should it become a creditor of the
Company, to obtain payment of claims in certain cases, or to realize on
certain property received in respect of any such claim as security or
otherwise. The Trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the Commission for permission to continue
or resign.
15. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of the Company, as such, shall have any liability
for any obligations of the Company under the Securities or the Indenture or
for any claim based on, in
A-11
respect of, or by reason of, such obligations or their creation. Each Holder
of Securities, by accepting a Security, waives and releases all such
liability. The waiver and release are part of the consideration for issuance
of the Securities. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the Commission that
such a waiver is against public policy.
16. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Securities and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Continental Resources, Inc.
000 Xxxxx Xxxxxxxxxxxx, 0xx Xxxxx
X.X. Xxx 0000
Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
A-12
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.
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/ /1 acquired for the undersigned's own account, without transfer (in
satisfaction of Section 2.6(a)(ii)(A) or Section 2.6(d)(i)(A) of
the Indenture); or
2/ /2 transferred to the Company; or
3/ /3 transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
4/ /4 transferred pursuant to an effective registration statement under
the Securities Act; or
5/ /5 transferred pursuant to and in compliance with Regulation S under
the Securities Act of 1933, with transferee furnishing to the
Trustee a signed letter containing certain representations and
------------------------
*/ Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-13
agreements (the form of which letter substantially appears in
Section 2.14 of the Indenture); or
6/ /6 transferred to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933), that has furnished to the Trustee a signed letter
containing certain representations and agreements (the form of
which letter appears in Section 2.13 of the Indenture); or
7/ /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
------------------------------------------------------------------------------
----------------------
*/ Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-14
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.10 or 4.13 of the Indenture, check the box below:
/ /8 Section 4.10 / /9 Section 4.13
If you want to elect to have only part of the Security purchased by
the Company pursuant to Section 4.10 or Section 4.13 of the Indenture, state
the principal amount you elect to have purchased: $______________
Date: Your Signature:
-------- -------------------------------------------------
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee:(*)
-----------------------------------------
--------------------
*/ Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-15
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 Signature of
Date of Principal Amount of Principal Amount of this Global Security authorized officer of
Exchange this Global Security this Global Security following such Trustee or Note
decrease or increase Custodian
A-16
EXHIBIT B
(Form of Face of Exchange Security)
SERIES B NOTE
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR 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.
THIS SECURITY IS SUBORDINATED TO SENIOR DEBT, AS DEFINED IN THE
INDENTURE (AS DEFINED HEREIN), AND THE OBLIGATIONS OF EACH SUBSIDIARY
GUARANTOR UNDER THE SUBSIDIARY GUARANTEE CONTAINED IN THE INDENTURE ARE
SUBORDINATED TO GUARANTOR SENIOR INDEBTEDNESS, AS DEFINED IN THE INDENTURE,
OF SUCH SUBSIDIARY GUARANTOR.
B-1
CONTINENTAL RESOURCES, INC.
10 1/4% Senior Subordinated Notes due 2008
No. 1 $150,000,000
CUSIP Number: _____________
Continental Resources, Inc., an Oklahoma corporation, promises to pay
to Cede & Co., or registered assigns, the principal sum of One Hundred Fifty
Million Dollars on August 1, 2008.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Additional provisions of this Security are set forth on the other
side of this Security.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers and a
facsimile of its corporate seal to be affixed hereto and imprinted hereon.
Dated: ________, 1998
CONTINENTAL RESOURCES, INC.
By
-------------------------------------
Name:
Title:
By
-------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee, certifies that this is
one of the Securities referred to in the
within-mentioned Indenture:
By
----------------------------------
Authorized Signatory
Dated: , 1998
------------
B-2
(Back of Note)
10 1/4% Senior Subordinated Notes due 2008
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Continental Resources, Inc., an Oklahoma
corporation (the "COMPANY"), promises to pay interest on the principal amount
of this Security at the rate of 10 1/4% per annum, which interest shall be
payable in cash semiannually in arrears on each February 1 and August 1, or
if any such day is not a Business Day, on the next succeeding Business Day
(each an "INTEREST PAYMENT DATE"); PROVIDED that the first Interest Payment
Date shall be February 1, 1999. Interest on the Securities will accrue from
the most recent date to which interest has been paid or, if no interest has
been paid, from the date of original issuance. Interest will be computed on
the basis of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. On each Interest Payment Date the Company
will pay interest to the Person who is the Holder of record of this Security
as of the close of business on the January 15 or July 15 immediately
preceding such Interest Payment Date, even if this Security is cancelled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
Principal, premium, if any, and interest on this Security will be payable at
the office or agency of the Company maintained for such purpose within The
City and State of New York or, in the event the Securities do not remain in
book-entry form, at the option of the Company, payment of interest may be
made by check mailed to the Holder of this Security at its address set forth
in the register of Holders of Securities; PROVIDED that all payments with
respect to the Global Securities and Definitive Securities having an
aggregate principal amount of $5.0 million or more the Holders of which have
given wire transfer instructions to the Company at least 10 Business Days
prior to the applicable payment date will be required to be made by wire
transfer of immediately available funds to the accounts specified by the
Holders thereof. Such payment shall be in such coin or currency of the
United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, United States Trust
Company of New York, the Trustee under the Indenture, will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company or any Subsidiary Guarantor or any
other of the Company's Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Securities under an
Indenture dated as of July 24, 1998 ("INDENTURE") among the Company, the
Subsidiary Guarantors and the Trustee. The
B-3
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Sections 77aaa-77bbbb). The Securities are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Securities are general unsecured obligations of
the Company equal in an aggregate principal amount to $150,000,000 and will
mature on August 1, 2008.
The Securities are general unsecured senior subordinated
obligations of the Company limited to $150,000,000 million aggregate
principal amount (subject to Section 2.7 of the Indenture). The aggregate
principal amount of notes which may be authenticated and delivered under the
Indenture, including the Securities, is limited to $300.0 million (subject to
Section 2.7 of the Indenture). This Security is one of the Exchange
Securities referred to in the Indenture. The Securities include the Initial
Securities and any Exchange Securities issued in exchange for the Initial
Securities pursuant to the Indenture and the Registration Rights Agreement.
The Initial Securities and the Exchange Securities are treated as a single
class of securities under the Indenture. The Indenture imposes certain
limitations on the incurrence of Indebtedness by the Company and its
Restricted Subsidiaries, the payment of dividends and other distributions on
the Capital Stock of the Company and its Restricted Subsidiaries, the
purchase or redemption of Capital Stock of the Company and Capital Stock of
such Restricted Subsidiaries, certain purchases or redemptions of
Subordinated Indebtedness, the sale or transfer of assets and Capital Stock
of Restricted Subsidiaries, the issuance or sale of Capital Stock of
Restricted Subsidiaries, the Investments of the Company and its Subsidiaries
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.
B-4
5. OPTIONAL REDEMPTION.
(a) The Securities are not redeemable at the Company's option
prior to August 1, 2003. From and after August 1, 2003, the Securities will
be subject to redemption at the option of the Company, in whole or in part,
upon not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below PLUS accrued
and unpaid interest thereon to the applicable redemption date, if redeemed
during the twelve-month period beginning on August 1 of the years indicated
below:
PERCENTAGE OF
YEAR PRINCIPAL AMOUNT
---- ----------------
2003..........................................105.125%
2004..........................................103.417%
2005..........................................101.708%
2006 and thereafter...........................100.000%
(b) Notwithstanding the provisions of clause (a) of this Paragraph
5, prior to August 1, 2001 the Company may, at its option, on any one or more
occasions, redeem up to 35% of the original aggregate principal amount of
Securities at a redemption price equal to 110.250% of the principal amount
thereof, plus accrued and unpaid interest, if any, thereon to the redemption
date, with the net proceeds of sales of public common stock of the Company;
PROVIDED that at least 65% of the original aggregate principal amount of
Securities must remain outstanding immediately after the occurrence of such
redemption; and PROVIDED, further, that any such redemption shall occur
within 60 days after the date of the closing of the related sale of such
common stock.
(c) Notwithstanding the provisions of clause (a) of this Paragraph
5, upon the occurrence of a Change of Control at any time on or prior to
August 1, 2003, the Company may, at its option, redeem in whole but not in
part, the Securities at a redemption price equal to 100% of the principal
amount thereof, plus the Applicable Premium as of, and accrued but unpaid
interest, if any, to, the date of redemption (subject to the right of Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date) provided that such redemption shall be made no more
than 90 days after the occurrence of a Change of Control. The Company shall
notify the Trustee and, by mail, the Holders of the Securities of its
decision to redeem the Securities pursuant to this Paragraph 5(c) within 30
days of the occurrence of a Change of Control.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect
to the Securities.
B-5
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, if the Company
does not redeem the Securities pursuant to paragraph 5(c), each Holder of
Securities shall 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 pursuant to the offer described below (the "Change of Control
Offer") at an offer price in cash equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest, if any, thereon to the date
of purchase (the "Change of Control Payment"). The right of the Holders of
the Securities to require the Company to repurchase such Securities upon a
Change of Control may not be waived by the Trustee without the approval of
the Holders of the Securities required by Section 9.2 of the Indenture.
Within 30 days following any Change of Control, the Company will mail a
notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Securities
pursuant to the procedures required by the Indenture and described in such
notice. The Change of Control Payment shall be made on a business day not
less than 30 days nor more than 60 days after such notice is mailed. The
Company and each Subsidiary Guarantor will comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable
in connection with the repurchase of the Securities as a result of a Change
of Control.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales permitted by the Indenture, when the aggregate amount of Excess
Proceeds exceeds $15 million, the Company shall make an Asset Sale Offer to
purchase the maximum principal amount of Securities and any other Pari Passu
Indebtedness to which the Asset Sale Offer applies that may be purchased out
of the Excess Proceeds, at an offer price in cash in an amount equal to, in
the case of the Securities, 100% of the principal amount thereof, plus
accrued and unpaid interest thereon to the date of purchase or, in the case
of any Pari Passu Indebtedness, 100% of the principal amount thereof (or with
respect to discount Pari Passu Indebtedness, the accreted value thereof) on
the date of purchase, in each case, in accordance with the procedures set
forth in Section 3.9 of the Indenture or the agreements governing the Pari
Passu Indebtedness, as applicable. To the extent that the aggregate
principal amount (or accreted value, as the case may be) of Securities, and
Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the sum of (i) the aggregate principal amount
of Securities surrendered by Holders thereof and (ii) the aggregate principal
amount or accreted value, as the case may be, of Pari Passu Indebtedness
surrendered by holders or lenders thereof exceeds the amount of Excess
Proceeds, the Trustee and the trustee or other lender representative for the
Pari Passu Indebtedness shall select the Securities and the other Pari Passu
Indebtedness to be purchased on a pro rata basis, based on the aggregate
principal amount (or accreted value, as applicable) thereof surrendered in
such Asset
B-6
Sale Offer. Upon completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Securities are to be redeemed at its registered address.
Securities in denominations larger than $1,000 may be redeemed in part but
only in integral multiples of $1,000, unless all of the Securities held by a
Holder are to be redeemed. On and after the redemption date interest ceases
to accrue on the aggregate principal amount of the Securities called for
redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities may be
issued initially in the form of one or more fully registered Global
Securities. The Securities may also be issued in registered form without
coupons in minimum denominations of $1,000 and integral multiples of $1,000.
The transfer of Securities may be registered and Securities may be exchanged
as provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Company need not exchange
or register the transfer of any Security or portion of a Security selected
for redemption, except for the unredeemed portion of any Security being
redeemed in part. Also, it need not exchange or register the transfer of any
Security for a period of 15 days before a selection of Securities to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Security
may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Securities may be amended or supplemented
with the consent of the Holders of at least a majority in aggregate principal
amount of the Securities then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or the tender offer or
exchange offer for, such Securities), and any existing Default or Event of
Default under, or compliance with any provision of the Indenture or the
Securities may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities. Without the consent of
any Holder of a Security, the Indenture or the Securities may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Securities in addition to or in place of certificated
Securities, to provide for the assumption of the Company's obligations to
Holders of the Securities in case of a merger or consolidation, to make any
change that would provide any additional rights or benefits to the Holders of
the Securities or that does not adversely affect the legal rights under the
Indenture of any such Holder, to add guarantees with respect to the
Securities or to secure the Securities or to comply with the requirements of
the Commission in order to effect
B-7
or maintain the qualification of the Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 consecutive days in the payment when due of interest on the
Securities (whether or not prohibited by the provisions of Article 10 of the
Indenture); (ii) default in payment when due of the principal of or premium,
if any, on the Securities (whether or not prohibited by the provisions of
Article 10 of the Indenture); (iii) failure by the Company or any Subsidiary
Guarantor to comply with the provisions of Article 5 of the Indenture; (iv)
failure by the Company for 30 consecutive days after notice from the Trustee
or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding to comply with the provisions of Sections 4.3,
4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18 and 4.19 of the
Indenture; (v) failure by the Company for 60 consecutive days after notice
from the Trustee or the Holders of at least 25% in aggregate principal amount
of the Securities then outstanding to comply with any of its other agreements
or covenants in, or provisions of, this Security or in the Indenture; (vi)
except as permitted by the Indenture, any Subsidiary Guarantee shall be held
in any judicial proceeding to be unenforceable or invalid or shall cease for
any reason to be in full force and effect or a Subsidiary Guarantor or any
Person acting on behalf of a Subsidiary Guarantor, shall deny or disaffirm
such Subsidiary Guarantor's obligations under its Subsidiary Guarantee; (vii)
default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any Restricted Subsidiary whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture, which default (a) is caused by a failure to pay principal of such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (b) results
in the acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there is then
existing a Payment Default or the maturity of which has been so accelerated,
aggregates $10 million or more; (viii) a final non-appealable judgment or
order or final non-appealable judgments or orders are rendered against the
Company or any Restricted Subsidiary that remain unpaid or discharged for a
period of 60 days and that require the payment in money, either individually
or in an aggregate amount, that is more than $10 million; and (ix) certain
events of bankruptcy or insolvency with respect to the Company or any
Restricted Subsidiary. If any Event of Default (other than an Event of
Default described in clause (ix) above) occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding
Securities may declare all the Securities to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising
from certain events of bankruptcy or insolvency with respect to the Company
or any Restricted Subsidiary, all outstanding Securities will become due and
payable without further action or notice. Holders of the Securities may not
B-8
enforce the Indenture or the Securities except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in aggregate principal
amount of the then outstanding Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Securities notice of any continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of principal or interest)
if it determines that withholding notice is in their interest. The Holders
of a majority in aggregate principal amount of the Securities then
outstanding by notice to the Trustee may on behalf of the Holders of all of
the Securities waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest or premium on, or the principal of, the
Securities. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is
required, within 5 Business days after becoming aware of any Default or Event
of Default, to deliver to the Trustee a statement specifying such Default or
Event of Default.
13. SUBORDINATION. The Securities are subordinated to Senior Debt
of the Company and the Subsidiary Guarantees are subordinated to Guarantor
Senior Debt of the Subsidiary Guarantors. To the extent provided in the
Indenture, Senior Debt must be paid before the Securities may be paid and
Guarantor Senior Debt of a Subsidiary Guarantor must be paid before a
Subsidiary Guarantor may pay under its Subsidiary Guarantee. The Company
agrees, and each Holder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities, including, but not limited to, the payment of
principal of, premium, if any, and interest on the Securities, and any other
payment Obligation of the Company in respect of the Securities and the
obligations of each Subsidiary Guarantor under its Subsidiary Guarantee are
subordinated in right of payment, to the extent and in the manner provided in
the Indenture, to the prior payment in full in cash of all Senior Debt of the
Company and, in the case of a Subsidiary Guarantor, all Guarantor Senior Debt
of such Subsidiary Guarantor (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed) and authorizes the
Trustee to give effect and appoints the Trustee as attorney-in-fact for such
purpose.
14. TRUSTEE DEALINGS WITH COMPANY. The Indenture contains certain
limitations on the rights of the Trustee, should it become a creditor of the
Company, to obtain payment of claims in certain cases, or to realize on
certain property received in respect of any such claim as security or
otherwise. The Trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the Commission for permission to continue
or resign.
15. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of the Company, as such, shall have any liability
for any obligations of the Company under the Securities or the Indenture or
for any claim based on, in
B-9
respect of, or by reason of, such obligations or their creation. Each Holder
of Securities, by accepting a Security, waives and releases all such
liability. The waiver and release are part of the consideration for issuance
of the Securities. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the Commission that
such a waiver is against public policy.
16. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Securities and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Continental Resources, Inc.
000 Xxxxx Xxxxxxxxxxxx, 0xx Xxxxx
X.X. Xxx 0000
Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
B-10
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.
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/ /10 acquired for the undersigned's own account, without transfer (in
satisfaction of Section 2.6(a)(ii)(A) or Section 2.6(d)(i)(A) of
the Indenture); or
2/ /11 transferred to the Company; or
3/ /12 transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
4/ /13 transferred pursuant to an effective registration statement under
the Securities Act; or
5/ /14 transferred pursuant to and in compliance with Regulation S under
the Securities Act of 1933, with transferee furnishing to the
Trustee a signed
--------------------
(*)/ Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
B-11
letter containing certain representations and agreements (the
form of which letter substantially appears in Section 2.14 of the
Indenture); or
6/ /15 transferred to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933), that has furnished to the Trustee a signed letter
containing certain representations and agreements (the form of
which letter appears in Section 2.13 of the Indenture); or
7/ /16 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
------------------------------------------------------------------------------
---------------
(*)/ Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
B-12
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 Signature of
Date of Principal Amount of Principal Amount of this Global Security authorized officer of
Exchange this Global Security this Global Security following such Trustee or Note
decrease or increase Custodian
B-13
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.10 or 4.13 of the Indenture, check the box below:
/ /17 Section 4.10 / /18 Section 4.13
If you want to elect to have only part of the Security purchased by
the Company pursuant to Section 4.10 or Section 4.13 of the Indenture, state
the principal amount you elect to have purchased: $______________
Date: Your Signature:
-------------------- ---------------------------
(Sign exactly as your name
appears on the face of this
Security)
Signature Guarantee:(*)
-------------------
________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
B-14
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"), Continental Resources, Inc. (together with its
successors and assigns, the "Company"), each other then existing Subsidiary
Guarantor under the Indenture referred to below, and United States Trust
Company of New York as Trustee under the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Company and the Trustee have heretofore executed and
delivered an Indenture, dated as of July 24, 1998 (as amended, supplemented,
waived or otherwise modified, the "INDENTURE"), providing for the issuance of
an aggregate principal amount of $150.0 million of 10 1/4% Senior Subordinated
Notes due 2008 of the Company (the "Securities";
WHEREAS, Section 4.14 of the Indenture provides that the Company is
required to cause each Restricted Subsidiary acquired or created by the
Company or any Restricted Subsidiary to execute and deliver to the Trustee a
Subsidiary Guarantee pursuant to which such Subsidiary Guarantor will
unconditionally guarantee, jointly and severally with the other Subsidiary
Guarantors, the full and prompt payment of the Securities pursuant to Article
11 of the Indenture subject to the subordination provisions of Article 10 of
the Indenture; 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
C-1
as a whole and not to any particular section hereof.
ARTICLE 2
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. (a) The Guarantor hereby jointly and
severally, unconditionally guarantees to each Holder of a Security
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of
the Indenture, the Securities or the obligations of the Company thereunder,
that: (a) the principal of and premium and interest, on the Securities shall
be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and
interest on premium and interest, on the Securities, if any, if lawful, and
all other obligations of the Company to the Holders or the Trustee thereunder
shall be promptly paid in full or performed, all in accordance with the terms
thereof; and (b) in case of any extension of time of payment or renewal of
any Securities or any of such other obligations, that the same shall be
promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise in accordance with the provisions of Article 11 of the Indenture.
(b) The Guarantor agrees that the Indebtedness evidenced by its
Subsidiary Guarantee shall be subordinated in right of payment, to the extent
and in the manner provided in Article 10 of the Indenture, to the prior
payment when due in cash or Cash Equivalents of all Guarantor Senior Debt of
the Guarantor and that the subordination is for the benefit of and
enforceable by the holders of Guarantor Senior Debt of the Guarantor.
ARTICLE 3
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 and the
C-2
holders of any Guarantor Senior Indebtedness, 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.
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.
[NAME OF GUARANTOR],
as a Subsidiary Guarantor
By:
------------------------------------
Name:
Title:
C-3
CONTINENTAL RESOURCES, INC.
By:
------------------------------------
Name:
Title:
CONTINENTAL GAS
as a Subsidiary Guarantor
By:
------------------------------------
Name:
Title:
CONTINENTAL CRUDE CO.
as a Subsidiary Guarantor
By:
------------------------------------
Name:
Title:
[Add signature block for any other
existing Subsidiary Guarantors]
UNITED STATES TRUST COMPANY OF NEW YORK
By:
------------------------------------
Name:
Title:
C-4
EXECUTION COPY
--------------------------------------------------------------------------------
CONTINENTAL RESOURCES, INC.
As Issuer
CONTINENTAL GAS, INC.
CONTINENTAL CRUDE CO.
As Subsidiary Guarantors
10 1/4% SENIOR SUBORDINATED NOTES DUE 2008
-------------------
INDENTURE
Dated as of July 24, 1998
-------------------
UNITED STATES TRUST COMPANY OF NEW YORK
As Trustee
-------------------
--------------------------------------------------------------------------------
C-5
CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
--------------- ---------
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.3
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.3
313 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6; 12.2
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
314 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3; 12.2
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3-10.5
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.5
(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5; 12.2
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316 (a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . 2.9
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.12
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
318 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1
_____________
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE. . . . . . . . . . . . . . . . 1
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Other Definitions . . . . . . . . . . . . . . . . . . . 23
Section 1.3. Incorporation By Reference of Trust Indenture Act . . . 24
Section 1.4. Rules of Construction . . . . . . . . . . . . . . . . . 25
ARTICLE 2
THE SECURITIES. . . . . . . . . . . . . . . . 26
Section 2.1. Form, Dating and Terms. . . . . . . . . . . . . . . . . 26
Section 2.2. Execution and Authentication. . . . . . . . . . . . . . 32
Section 2.3. Registrar and Paying Agent. . . . . . . . . . . . . . . 33
Section 2.4. Paying Agent to Hold Money in Trust . . . . . . . . . . 34
Section 2.5. Holder Lists. . . . . . . . . . . . . . . . . . . . . . 34
Section 2.6. Transfer and Exchange . . . . . . . . . . . . . . . . . 35
Section 2.7. Replacement Securities. . . . . . . . . . . . . . . . . 38
Section 2.8. Outstanding Securities. . . . . . . . . . . . . . . . . 39
Section 2.9. Temporary Securities. . . . . . . . . . . . . . . . . . 39
Section 2.10. CUSIP Number. . . . . . . . . . . . . . . . . . . . . . 39
Section 2.11. Cancellation. . . . . . . . . . . . . . . . . . . . . . 40
Section 2.12. Defaulted Interest. . . . . . . . . . . . . . . . . . . 40
SECTION 2.13. Form of Certificate to be Delivered in Connection
with Transfers to Institutional Accredited Investors. . 41
SECTION 2.14. Form of Certificate to be Delivered in Connection
with Transfers Pursuant to Regulations. . . . . . . . . 42
SECTION 2.15. Computation of Interest . . . . . . . . . . . . . . . . 43
ARTICLE 3
REDEMPTION AND PREPAYMENT . . . . . . . . . . . . . . 44
Section 3.1. Notices to Trustee. . . . . . . . . . . . . . . . . . . . 44
Section 3.2. Selection of Securities to Be Redeemed. . . . . . . . . . 44
Section 3.3. Notice of Redemption. . . . . . . . . . . . . . . . . . . 45
Section 3.4. Effect of Notice of Redemption. . . . . . . . . . . . . . 46
Section 3.5. Deposit of Redemption Price . . . . . . . . . . . . . . . 46
Section 3.6. Securities Redeemed in Part . . . . . . . . . . . . . . . 46
Section 3.7. Optional Redemption . . . . . . . . . . . . . . . . . . . 46
Section 3.8. Mandatory Redemption. . . . . . . . . . . . . . . . . . . 48
Section 3.9. Offer to Purchase By Application of Excess Proceeds . . . 48
ARTICLE 4
COVENANTS . . . . . . . . . . . . . . . . . . 50
Section 4.1. Payment of Securities. . . . . . . . . . . . . . . . . . . 50
Section 4.2. Maintenance of Office or Agency. . . . . . . . . . . . . . 51
Section 4.3. Commission Reports . . . . . . . . . . . . . . . . . . . . 51
Section 4.4. Compliance Certificate . . . . . . . . . . . . . . . . . . 52
Section 4.5. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.6. Stay, Extension and Usury Laws . . . . . . . . . . . . . . 53
Section 4.7. Restricted Payments. . . . . . . . . . . . . . . . . . . . 53
Section 4.8. Dividend and Other Payment Restrictions Affecting
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Restricted Subsidiaries. . . . . . . . . . . . . . . . . . 56
Section 4.9. Incurrence of Indebtedness and Issuance of
Disqualified Stock . . . . . . . . . . . . . . . . . . . . 57
Section 4.10. Asset Sales. . . . . . . . . . . . . . . . . . . . . . . . 59
Section 4.11. Transactions with Affiliates . . . . . . . . . . . . . . . 61
Section 4.12. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 4.13. Offer to Repurchase Upon Change of Control . . . . . . . . 62
Section 4.14. Additional Subsidiary Guarantees . . . . . . . . . . . . . 64
Section 4.15. Corporate Existence. . . . . . . . . . . . . . . . . . . . 64
Section 4.16. No Layering. . . . . . . . . . . . . . . . . . . . . . . . 64
Section 4.17. Business Activities. . . . . . . . . . . . . . . . . . . . 65
Section 4.18. Sale and Leaseback Transactions . . . . . . . . . . . . . 65
Section 4.19. Designation of Unrestricted Subsidiaries . . . . . . . . . 65
ARTICLE 5
SUCCESSORS. . . . . . . . . . . . . . . . . . 66
Section 5.1. Merger, Consolidation, or Sale of Substantially All
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 5.2. Successor Corporation Substituted; Subsidiary
Guarantors Confirmed . . . . . . . . . . . . . . . . . . . 67
ARTICLE 6
DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . 67
Section 6.1. Events of Default. . . . . . . . . . . . . . . . . . . . . 67
Section 6.2. Acceleration . . . . . . . . . . . . . . . . . . . . . . . 70
Section 6.3. Other Remedies . . . . . . . . . . . . . . . . . . . . . . 70
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 of Securities 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. . . . . . . . . . . . . . . . . . . 74
Section 6.12. Restoration of Rights and Remedies . . . . . . . . . . . . 74
ARTICLE 7
TRUSTEE. . . . . . . . . . . . . . . . . . . 74
Section 7.1. Duties of Trustee. . . . . . . . . . . . . . . . . . . . . 74
Section 7.2. Rights of Trustee. . . . . . . . . . . . . . . . . . . . . 76
Section 7.3. Individual Rights of Trustee . . . . . . . . . . . . . . . 77
Section 7.4. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . 77
Section 7.5. Notice of Defaults . . . . . . . . . . . . . . . . . . . . 77
Section 7.6. Reports by Trustee to Holders of the Securities. . . . . . 78
Section 7.7. Compensation and Indemnity . . . . . . . . . . . . . . . . 78
Section 7.8. Replacement of Trustee . . . . . . . . . . . . . . . . . . 79
Section 7.9. Successor Trustee by Merger, etc . . . . . . . . . . . . . 80
Section 7.10. Eligibility; Disqualification. . . . . . . . . . . . . . . 81
Section 7.11. Preferential Collection of Claims Against Company. . . . . 81
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE. . . . . . . . . . 81
Section 8.1. Option to Effect Legal Defeasance or Covenant Defeasance. . 81
Section 8.2. Legal Defeasance and Discharge. . . . . . . . . . . . . . . 81
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Section 8.3. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . 82
Section 8.4. Conditions to Legal or Covenant Defeasance. . . . . . . . . 83
Section 8.5. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions . . . . . . . . . . . 84
Section 8.6. Repayment to Company. . . . . . . . . . . . . . . . . . . . 85
Section 8.7. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . 85
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER. . . . . . . . . . . . . . 86
Section 9.1. Without Consent of Holders of Securities. . . . . . . . . . 86
Section 9.2. With Consent of Holders of Securities . . . . . . . . . . . 87
Section 9.3. Compliance with Trust Indenture Act . . . . . . . . . . . . 89
Section 9.4. Revocation and Effect of Consents . . . . . . . . . . . . . 89
Section 9.5. Notation on or Exchange of Securities . . . . . . . . . . . 89
Section 9.6. Trustee to Sign Amendment, etc. . . . . . . . . . . . . . . 89
ARTICLE 10
SUBORDINATION. . . . . . . . . . . . . . . . . . 90
Section 10.1. Agreement to Subordinate. . . . . . . . . . . . . . . . . . 90
Section 10.2. Certain Definitions . . . . . . . . . . . . . . . . . . . . 90
Section 10.3. Liquidation; Dissolution; Bankruptcy. . . . . . . . . . . . 91
Section 10.4. Default on Designated Senior Debt . . . . . . . . . . . . . 94
Section 10.5. Acceleration of Securities. . . . . . . . . . . . . . . . . 95
Section 10.6. When Distribution Must Be Paid Over . . . . . . . . . . . . 95
Section 10.7. Notice by Company . . . . . . . . . . . . . . . . . . . . . 96
Section 10.8. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 10.9. Relative Rights . . . . . . . . . . . . . . . . . . . . . . 96
Section 10.10. Subordination May Not Be Impaired by Company or the
Subsidiary Guarantors . . . . . . . . . . . . . . . . . . . 97
Section 10.11. Payment, Distribution or Notice to Representative . . . . . 97
Section 10.12. Rights of Trustee and Paying Agent. . . . . . . . . . . . . 98
Section 10.13. Authorization to Effect Subordination . . . . . . . . . . . 98
Section 10.14. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . 99
Section 10.15. No Waiver of Subordination Provisions . . . . . . . . . . . 99
ARTICLE 11
THE SUBSIDIARY GUARANTEES. . . . . . . . . . . . . . . 99
Section 11.1. The Subsidiary Guarantees . . . . . . . . . . . . . . . . . 99
Section 11.2. Subordination of Subsidiary Guarantees. . . . . . . . . . . 101
Section 11.3. Subsidiary Guarantors May Consolidate, etc., on Certain
Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Section 11.4. Releases of Subsidiary Guarantees . . . . . . . . . . . . . 102
Section 11.5. Limitation on Subsidiary Guarantor Liability. . . . . . . . 103
Section 11.6. "Trustee" to Include Paying Agent . . . . . . . . . . . . . 103
ARTICLE 12
MISCELLANEOUS. . . . . . . . . . . . . . . . . . 104
Section 12.1. Trust Indenture Act Controls. . . . . . . . . . . . . . . . 104
Section 12.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 12.3. Communication by Holders of Securities with Other Holders
of Securities. . . . . . . . . . . . . . . . . . . . . . . 105
Section 12.4. Certificate and Opinion as to Conditions Precedent. . . . . 105
Section 12.5. Statements Required in Certificate or Opinion . . . . . . . 106
Section 12.6. Rules by Trustee and Agents . . . . . . . . . . . . . . . . 106
Section 12.7. No Personal Liability of Directors, Officers,
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Employees and Stockholders. . . . . . . . . . . . . . . . . 106
Section 12.8. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 107
Section 12.9. No Adverse Interpretation of Other Agreements . . . . . . . 107
Section 12.10. Successors. . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 12.11. Severability. . . . . . . . . . . . . . . . . . . . . . . . 107
Section 12.12. Counterpart Originals . . . . . . . . . . . . . . . . . . . 107
Section 12.13. Table of Contents, Headings, Etc. . . . . . . . . . . . . . 107
EXHIBITS
Exhibit A FORM OF INITIAL SECURITY
Exhibit B FORM OF EXCHANGE SECURITY
EXHIBIT C FORM OF SUBSIDIARY GUARANTEE
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