EXHIBIT 4.1
XTO ENERGY INC.
AND
THE BANK OF NEW YORK,
Trustee
----------
INDENTURE
Dated as of April 23, 2003
----------
6 1/4% SENIOR NOTES DUE 2013
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.................................1
Section 1.1 Definitions........................................................................1
Section 1.2 Incorporation by Reference of Trust Indenture Act.................................28
Section 1.3 Rules of Construction.............................................................28
ARTICLE II THE NOTES.............................................................................29
Section 2.1 Form and Dating...................................................................29
Section 2.2 Execution and Authentication......................................................29
Section 2.3 Registrar and Paying Agent........................................................30
Section 2.4 Paying Agent to Hold Money in Trust...............................................31
Section 2.5 Noteholder Lists..................................................................31
Section 2.6 Transfer and Exchange.............................................................31
Section 2.7 Replacement Notes.................................................................32
Section 2.8 Outstanding Notes.................................................................32
Section 2.9 Temporary Notes...................................................................32
Section 2.10 Cancellation.....................................................................32
Section 2.11 Defaulted Interest...............................................................33
Section 2.12 CUSIP Numbers....................................................................33
Section 2.13 Issuance of Additional Notes.....................................................33
ARTICLE III SATISFACTION AND DISCHARGE...........................................................34
Section 3.1 Satisfaction and Discharge of Indenture...........................................34
Section 3.2 Application of Trust Money........................................................35
Section 3.3 Repayment to Company..............................................................35
ARTICLE IV REMEDIES..............................................................................36
Section 4.1 Events of Default.................................................................36
Section 4.2 Acceleration of Maturity; Rescission and Annulment................................38
Section 4.3 Collection of Indebtedness and Suits for Enforcement by Trustee...................40
Section 4.4 Trustee May File Proofs of Claim..................................................41
Section 4.5 Trustee May Enforce Claims Without Possession of Notes............................41
Section 4.6 Application of Money Collected....................................................42
Section 4.7 Limitation on Suits...............................................................42
Section 4.8 Unconditional Right of Holders to Receive Principal, Premium and Interest.........43
Section 4.9 Restoration of Rights and Remedies................................................43
Section 4.10 Rights and Remedies Cumulative...................................................43
Section 4.11 Delay or Omission Not Waiver.....................................................44
Section 4.12 Control by Holders...............................................................44
Section 4.13 Waiver of Past Defaults..........................................................44
Section 4.14 Waiver of Stay, Extension or Usury Laws..........................................45
Section 4.15 Undertaking for Costs............................................................45
ARTICLE V THE TRUSTEE...........................................................................45
Section 5.1 Notice of Defaults................................................................45
Section 5.2 Certain Rights of Trustee.........................................................45
Section 5.3 Trustee Not Responsible for Recitals or Issuance of Notes.........................47
Section 5.4 May Hold Notes....................................................................47
Section 5.5 Money Held in Trust...............................................................48
Section 5.6 Compensation and Reimbursement....................................................48
Section 5.7 Corporate Trustee Required; Eligibility...........................................49
Section 5.8 Conflicting Interests.............................................................49
Section 5.9 Resignation and Removal; Appointment of Successor.................................49
Section 5.10 Acceptance of Appointment by Successor...........................................50
Section 5.11 Merger, Conversion, Consolidation or Succession to Business......................51
Section 5.12 Preferential Collection of Claims Against Company................................51
ARTICLE VI HOLDERS' LISTS AND REPORTS BY TRUSTEE.................................................51
Section 6.1 Disclosure of Names and Addresses of Holders......................................51
Section 6.2 Reports By Trustee................................................................52
ARTICLE VII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.................................52
Section 7.1 Company May Consolidate, etc., Only on Certain Terms..............................52
Section 7.2 Successor Substituted.............................................................53
ARTICLE VIII SUPPLEMENTAL INDENTURES.............................................................54
Section 8.1 Supplemental Indentures without Consent of Holders................................54
Section 8.2 Supplemental Indentures with Consent of Holders...................................55
Section 8.3 Execution of Supplemental Indentures..............................................56
Section 8.4 Effect of Supplemental Indentures.................................................56
Section 8.5 Conformity with Trust Indenture Act...............................................56
Section 8.6 Reference in Notes to Supplemental Indentures.....................................56
Section 8.7 Notice of Supplemental Indentures.................................................56
ARTICLE IX COVENANTS.............................................................................57
Section 9.1 Payment of Principal, Premium, if any, and Interest...............................57
Section 9.2 Maintenance of Office or Agency...................................................57
Section 9.3 Money for Note Payments to Be Held in Trust.......................................57
Section 9.4 Corporate Existence...............................................................59
Section 9.5 Payment of Taxes and Other Claims.................................................59
Section 9.6 Maintenance of Properties.........................................................59
Section 9.7 Insurance.........................................................................60
Section 9.8 Statement by Officers as to Default...............................................60
Section 9.9 Reports...........................................................................60
Section 9.10 Limitation on Liens..............................................................61
Section 9.11 Waiver of Certain Covenants......................................................61
Section 9.12 Limitation on Non-Guarantor Restricted Subsidiaries..............................61
Section 9.13 Limitation on Restricted Payments................................................63
Section 9.14 Limitation on Indebtedness.......................................................67
Section 9.15 Change of Control................................................................68
Section 9.16 Limitation on Disposition of Proceeds of Asset Sales.............................69
Section 9.17 Limitation on Transactions with Affiliates.......................................72
Section 9.18 Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries..........................................................72
Section 9.19 Limitation on Sale/Leaseback Transactions........................................73
Section 9.20 Limitation on Conduct of Business................................................73
Section 9.21 Termination of Covenants.........................................................73
ARTICLE X REDEMPTION OF NOTES....................................................................74
Section 10.1 Redemption and Repurchase........................................................74
Section 10.2 Election to Redeem; Notice to Trustee............................................74
Section 10.3 Selection by Trustee of Notes to Be Redeemed.....................................74
Section 10.4 Notice of Redemption.............................................................75
Section 10.5 Deposit of Redemption Price......................................................75
Section 10.6 Securities Payable on Redemption Date............................................76
Section 10.7 Notes Redeemed in Part...........................................................76
Section 10.8 Optional Redemption at Make Whole Price..........................................76
ARTICLE XI DEFEASANCE AND COVENANT DEFEASANCE....................................................76
Section 11.1 Company's Option to Effect Defeasance or Covenant Defeasance.....................76
Section 11.2 Defeasance and Discharge.........................................................77
Section 11.3 Covenant Defeasance..............................................................77
Section 11.4 Conditions to Defeasance or Covenant Defeasance..................................78
Section 11.5 Deposited Money and U.S. Government Obligations to Be Held in Trust;
Other Miscellaneous Provisions...................................................79
Section 11.6 Reinstatement....................................................................80
ARTICLE XII CONVERSION...........................................................................80
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Section 12.1 No Conversion....................................................................80
ARTICLE XIII MISCELLANEOUS.......................................................................80
Section 13.1 Compliance Certificates and Opinions.............................................80
Section 13.2 Form of Documents Delivered to Trustee...........................................81
Section 13.3 Acts of Holders..................................................................81
Section 13.4 Notices, etc. to Trustee and Company.............................................83
Section 13.5 Notice to Holders; Waiver........................................................83
Section 13.6 Effect of Headings and Table of Contents.........................................84
Section 13.7 Successors and Assigns...........................................................84
Section 13.8 Separability Clause..............................................................84
Section 13.9 Benefits of Indenture............................................................84
Section 13.10 Governing Law; Trust Indenture Act Controls.....................................84
Section 13.11 Legal Holidays..................................................................85
Section 13.12 No Recourse Against Others......................................................85
Section 13.13 Duplicate Originals.............................................................85
Section 13.14 No Adverse Interpretation of Other Agreements...................................85
ARTICLE XIV GUARANTEES...........................................................................85
Section 14.1. Unconditional Guarantee.........................................................85
Section 14.2 Subsidiary Guarantors May Consolidate, etc. on Certain Terms.....................87
Section 14.3 Release of a Subsidiary Guarantor................................................87
Section 14.4 Limitation of Subsidiary Guarantor's Liability...................................88
Section 14.5 Contribution.....................................................................88
Section 14.6 Execution and Delivery of Evidence of Subsidiary Guarantee.......................88
Section 14.7 Severability.....................................................................88
Section 14.8 Payment..........................................................................89
Rule 144A/Regulation S Appendix...............................................................App.1
Exhibit 1 -- Form of Initial Notes..............................................................I-1
Exhibit A-1 -- Form of Exchange Note or Private Exchange Note...................................A-1
Exhibit B -- Form of Supplemental Indenture.....................................................B-1
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CROSS-REFERENCE SHEET
Provisions of the Trust Indenture Act of 1939
and the Indenture
Trust Indenture Indenture
Act Section Section
--------------- ---------
(S)310(a)(1) .................................................. 5.7
(a)(2) .................................................. 5.7
(b) .................................................. 5.7, 5.8
(S)311 .................................................. 5.12
(S)312(c) .................................................. 6.1
(S)313 .................................................. 6.2
(S)314(a) .................................................. 9.9
(c)(1) .................................................. 13.1
(c)(2) .................................................. 13.1
(e) .................................................. 13.1
(S)315(a) .................................................. 5.2
(b) .................................................. 5.1
(S)316(a)(last
sentence) .................................................. 2.8
(a(1)(A) .................................................. 4.2, 4.12
(a)(1)(B) .................................................. 4.13
(b) .................................................. 4.8
(c) .................................................. 13.3(d)
(S)317(a)(1) .................................................. 4.3
(a)(2) .................................................. 4.4
(b) .................................................. 9.3
(S)318(a) .................................................. 13.10(b)
This Cross-Reference Sheet shall not, for any purpose,
be deemed to be a part of the Indenture.
iv
INDENTURE, dated as of April 23, 2003 between XTO ENERGY INC., a Delaware
corporation (hereinafter called the "Company"), and THE BANK OF NEW YORK, a New
York banking corporation, trustee (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company desires to issue 6 1/4 % Senior Notes due 2013, the
issuance of which was authorized by or pursuant to resolution of the Board of
Directors of the Company; and
WHEREAS, all things necessary have been done to make the Notes, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions.
"Acquired Indebtedness" means Indebtedness of a Person (1) assumed in
connection with an Asset Acquisition from such Person, (2) outstanding at the
time such Person becomes a Subsidiary of any other Person (other than
Indebtedness incurred in connection with, or in contemplation of, the Asset
Acquisition or the Person becoming a Subsidiary) or (3) any renewals,
extensions, substitutions, refinancings or replacements of any of that
Indebtedness described in clauses (1) and (2), including successive
refinancings, so long as (i) any such new Indebtedness shall be in a principal
amount that does not exceed the principal amount (or, if such Indebtedness being
refinanced provides for an amount less than the principal amount to be due and
payable upon a declaration of acceleration, such lesser amount as of the date of
determination) so refinanced plus the amount of any premium required to be paid
in connection with such refinancing pursuant to the terms of the Indebtedness
refinanced or the amount of any premium reasonably determined by the Company as
necessary to accomplish such refinancing, plus the amount of expenses of the
Company incurred in connection with such refinancing, and (ii) in the case of
any refinancing of Subordinated Indebtedness, such new Indebtedness is made
subordinate to the Notes at least to the same extent as the Indebtedness being
refinanced and (iii)
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such new Indebtedness has an Average Life longer than the Average Life of the
Notes and a final Stated Maturity later than the final Stated Maturity of the
Notes.
"Act," when used with respect to any Holder, has the meaning specified in
Section 13.3.
"Additional Notes" means, subject to the Company's compliance with Section
9.14, 6 1/4 % Senior Notes due 2013 issued from time to time after the Issue
Date under the terms of this Indenture (other than pursuant to Section 2.6, 2.7,
2.9 or 10.7 of this Indenture and other than Exchange Notes or Private Exchange
Notes issued pursuant to an exchange offer for other Notes outstanding under
this Indenture).
"Adjusted Consolidated Net Tangible Assets" means (without duplication), as
of the date of determination, (a) the sum of (i) discounted future net revenues
from proved oil and gas reserves of the Company and its Restricted Subsidiaries
(including, without limitation, oil and gas reserves owned by an oil and gas
royalty trust and attributable to the Company or a Restricted Subsidiary by
virtue of its ownership of Capital Stock of such royalty trust) calculated in
accordance with SEC guidelines before any state or federal income taxes, as
estimated by a nationally recognized firm of independent petroleum engineers in
a reserve report prepared as of the end of the Company's most recently completed
fiscal year, as increased by, as of the date of determination, the estimated
discounted future net revenues from (A) estimated proved oil and gas reserves
acquired since the date of such year-end reserve report, and (B) estimated oil
and gas reserves attributable to upward revisions of estimates of proved oil and
gas reserves since the date of such year-end reserve report due to exploration,
development or exploitation activities, in each case calculated in accordance
with SEC guidelines (utilizing the prices utilized in such year-end reserve
report), and decreased by, as of the date of determination, the estimated
discounted future net revenues from (C) estimated proved oil and gas reserves
produced or disposed of since the date of such year-end reserve report and (D)
estimated oil and gas reserves attributable to downward revisions of estimates
of proved oil and gas reserves since the date of such year-end reserve report
due to changes in geological conditions or other factors which would, in
accordance with standard industry practice, cause such revisions, in each case
calculated in accordance with SEC guidelines (utilizing the prices utilized in
such year-end reserve report); provided that, in the case of each of the
determinations made pursuant to clauses (A) through (D), such increases and
decreases shall be as estimated by the Company's petroleum engineers, (ii) the
capitalized costs that are attributable to oil and gas properties of the Company
and its Restricted Subsidiaries to which no proved oil and gas reserves are
attributable, based on the Company's books and records as of a date no earlier
than the date of the Company's latest annual or quarterly financial statements,
(iii) the Net Working Capital on a date no earlier than the date of the
Company's latest annual or quarterly financial statements and (iv) the greater
of (A) the net book value on a date no earlier than the date of the Company's
latest annual or quarterly financial statements or (B) the appraised value, as
estimated by independent appraisers, of other tangible assets (including,
without duplication, investments in unconsolidated Restricted Subsidiaries) of
the Company and its Restricted Subsidiaries, as of the date no earlier than the
date of the Company's latest audited financial statements, minus (b) the sum of
(i) minority interests (other than a minority interest in a Subsidiary that is a
business trust or similar entity formed for the primary purpose of issuing
preferred securities the proceeds of which are loaned
2
to the Company or a Restricted Subsidiary), (ii) any net gas balancing
liabilities of the Company and its Restricted Subsidiaries reflected in the
Company's latest audited financial statements, (iii) to the extent included in
(a)(i) above, the discounted future net revenues, calculated in accordance with
SEC guidelines (using the prices utilized in the Company's year-end reserve
report), attributable to reserves which are required to be delivered to third
parties to fully satisfy the obligations of the Company and its Restricted
Subsidiaries with respect to Volumetric Production Payments on the schedules
specified with respect thereto and (iv) the discounted future net revenues,
calculated in accordance with SEC guidelines (using prices utilized in the
Company's year-end reserve report), attributable to reserves subject to
Dollar-Denominated Production Payments which, based on the estimates of
production and price assumptions included in determining the discounted future
net revenues specified in (a)(i) above, would be necessary to fully satisfy the
payment obligations of the Company and its Restricted Subsidiaries with respect
to Dollar-Denominated Production Payments on the schedules specified with
respect thereto. If the Company changes its method of accounting from the
successful efforts method to the full cost method or a similar method of
accounting, "Adjusted Consolidated Net Tangible Assets" will continue to be
calculated as if the Company was still using the successful efforts method of
accounting.
.. "Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the
amount by which the fair value of the Properties of such Subsidiary Guarantor
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date), but excluding liabilities under
the Subsidiary Guarantee of such Subsidiary Guarantor at such date.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control," when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of this definition, beneficial ownership of 10% or more of the voting
common equity (on a fully diluted basis including options or warrants to
purchase such equity, but only if exercisable at the date of determination or
within 60 days thereof) of a Person shall be deemed to constitute control of
such Person. No Person shall be deemed an Affiliate of an oil and gas royalty
trust solely by virtue of ownership of units of beneficial interest in such
trust.
"Agent Members" has the meaning specified in Section 2.1(b) of the
Appendix.
"Appendix" has the meaning specified in Section 2.1.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or any Restricted Subsidiary shall be merged with
or into the Company or any Restricted Subsidiary or (b) the acquisition by the
Company or any Restricted Subsidiary of the
3
assets of any Person which constitute all or substantially all of the assets of
such Person or any division or line of business of such Person.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other
disposition to any Person other than the Company or any of its Restricted
Subsidiaries (including, without limitation, by way of a Production Payment or
by way of merger or consolidation) (collectively, for purposes of this
definition, a "transfer"), directly or indirectly, in one or a series of related
transactions, of (a) any Capital Stock of any Restricted Subsidiary held by the
Company or any Restricted Subsidiary; (b) all or substantially all of the
properties and assets of any division or line of business of the Company or any
of its Restricted Subsidiaries; or (c) any other properties or assets of the
Company or any of its Restricted Subsidiaries other than any abandonment,
farm-in, farm-out, lease or sublease of Oil and Gas Properties in the ordinary
course of business or any disposition of hydrocarbons or other mineral products
in the ordinary course of business. For the purposes of this definition, the
term "Asset Sale" shall not include (i) any transfer of properties or assets
that is governed by, and made in accordance with, the provisions of Article VII
hereof; (ii) any transfer of properties or assets to an Unrestricted Subsidiary,
if such transfer is made in compliance with Section 9.13 hereof; (iii) any trade
or exchange of Oil and Gas Properties or Capital Stock in any corporation or
royalty trust in the Oil and Gas Business owned by the Company or any Restricted
Subsidiary for Oil and Gas Properties owned or held by another Person provided
that (x) the Fair Market Value of the Properties or Capital Stock traded or
exchanged by the Company or such Restricted Subsidiary (including any cash or
Cash Equivalents, not to exceed 15% of such Fair Market Value, to be delivered
by the Company or such Restricted Subsidiary) is reasonably equivalent to the
Fair Market Value of the Properties (together with any cash or Cash Equivalents,
not to exceed 15% of such Fair Market Value) to be received by the Company or
such Restricted Subsidiary as determined in good faith by (A) any Officer of the
Company if such Fair Market Value is less than $5,000,000 and (B) the Board of
Directors of the Company as evidenced by a Board Resolution if such Fair Market
Value is equal to or in excess of $5,000,000, provided that if such resolution
indicates that such Fair Market Value is equal to or in excess of $10,000,000
such resolution shall be accompanied by a written appraisal by a nationally
recognized investment banking firm or appraisal firm, in each case specializing
or having a specialty in Oil and Gas Properties, and (y) such exchange is
approved by a majority of the Disinterested Directors of the Company; (iv)
Sale/Leaseback Transactions in compliance with Section 9.19; or (v) any transfer
of Properties having a Fair Market Value of less than $2,000,000.
"Attributable Indebtedness" means, with respect to any particular lease
under which any Person is at the time liable and at any date as of which the
amount thereof is to be determined, the present value of the total net amount of
rent required to be paid by such Person under the lease during the primary term
thereof, without giving effect to any renewals at the option of the lessee,
discounted from the respective due dates thereof to such date of determination
at the rate of interest per annum implicit in the terms of the lease. As used in
the preceding sentence, the "net amount of rent" under any lease for any such
period shall mean the sum of rental and other payments required to be paid with
respect to such period by the lessee thereunder, excluding any amounts required
to be paid by such lessee on account of maintenance and repairs, insurance,
taxes, assessments, water rates or similar charges. In the case of any lease
which is terminable by
4
the lessee upon payment of a penalty, such net amount of rent shall also include
the amount of such penalty, but no rent shall be considered as required to be
paid under such lease subsequent to the first date upon which it may be so
terminated.
"Average Life" means, with respect to any Indebtedness, as at any date of
determination, the quotient obtained by dividing (a) the sum of the products of
(i) the number of years (and any portion thereof) from the date of determination
to the date or dates of each successive scheduled principal payment (including
any sinking fund or mandatory redemption payment requirements) of such
Indebtedness multiplied by (ii) the amount of each such principal payment by (b)
the sum of all such principal payments.
"Board of Directors" means, with respect to the Company, either the board
of directors of the Company or any duly authorized committee of such board of
directors, and, with respect to any Restricted Subsidiary, either the board of
directors of such Restricted Subsidiary or any duly authorized committee of that
board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by its Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee, and with respect to a Restricted
Subsidiary, a copy of a resolution certified by the Secretary or an Assistant
Secretary of such Restricted Subsidiary to have been duly adopted by its Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the Borough of Manhattan,
The City of New York, New York, or the city in which the Trustee's Corporate
Trust Office is located, are authorized or obligated by law or executive order
to close.
"Capital Stock" means, with respect to any Person, any and all shares,
units of beneficial interest (including of an oil and gas royalty trust),
interests, participations, rights in or other equivalents in the equity
interests (however designated) in such Person, and any rights (other than debt
securities convertible into an equity interest), warrants or options exercisable
for, exchangeable for or convertible into such an equity interest in such
Person.
"Capitalized Lease Obligation" means any obligation to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) any
property (whether real, personal or mixed) that is required to be classified and
accounted for as a capital lease obligation under GAAP, and, for the purpose of
this Indenture, the amount of such obligation at any date shall be the
capitalized amount thereof at such date, determined in accordance with GAAP.
"Cash Equivalents" means (a) any evidence of Indebtedness with a maturity
of 365 days or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in support
thereof); (b) demand and time deposits and certificates of deposit
5
or acceptances with a maturity of 365 days or less of any financial institution
that is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $500,000,000; (c) commercial
paper with a maturity of 365 days or less issued by a corporation that is not an
Affiliate of the Company and is organized under the laws of any state of the
United States or the District of Columbia and rated at least A-1 by S&P or at
least P-1 by Moody's; (d) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (a) above
entered into with any commercial bank meeting the specifications of clause (b)
above; and (e) overnight bank deposits and bankers' acceptances at any
commercial bank meeting the qualifications specified in clause (b) above.
"Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d)(3) or
14(d)(2) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50%
of the total voting power of the outstanding Voting Stock of the Company; (b)
the Company, either individually or in conjunction with one or more Restricted
Subsidiaries, sells, conveys, transfers or leases, or the Restricted
Subsidiaries sell, convey, transfer or lease, all or substantially all of the
assets of the Company and the Restricted Subsidiaries, taken as a whole (either
in one transaction or a series of related transactions), including Capital Stock
of the Restricted Subsidiaries, to any Person (other than the Company or a
Wholly Owned Restricted Subsidiary); (c) during any consecutive two-year period,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by such
Board of Directors or whose nomination for election by the stockholders of the
Company was approved by a vote of 66 2/3% of the directors 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 of the Company then in office;
or (d) the liquidation or dissolution of the Company.
"Change of Control Notice" has the meaning specified in Section 9.15(c).
"Change of Control Offer" has the meaning specified in Section 9.15(a).
"Change of Control Purchase Date" has the meaning specified in Section
9.15(c).
"Change of Control Purchase Price" has the meaning specified in Section
9.15(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder issued by the Internal Revenue Service.
"Commission" or "SEC" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
6
"Common Stock" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its President, any Vice
President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the ratio
of (a) the sum of Consolidated Net Income, Consolidated Interest Expense,
Consolidated Income Tax Expense and Consolidated Non-cash Charges deducted in
computing Consolidated Net Income, in each case, for such period, of the Company
and its Restricted Subsidiaries on a consolidated basis, all determined in
accordance with GAAP, decreased (to the extent included in determining
Consolidated Net Income) by the sum of (x) the amount of deferred revenues that
are amortized during such period and are attributable to reserves that are
subject to Volumetric Production Payments and (y) amounts recorded in accordance
with GAAP as repayments of principal and interest pursuant to Dollar-Denominated
Production Payments, to (b) the sum of such Consolidated Interest Expense for
such period; provided that (i) in making such computation, the Consolidated
Interest Expense attributable to interest on any Indebtedness required to be
computed on a pro forma basis in accordance with clause (x) of Section 9.14
hereof and bearing a floating interest rate shall be computed as if the rate in
effect on the date of computation had been the applicable rate for the entire
period, (ii) in making such computation, the Consolidated Interest Expense
attributable to interest on any Indebtedness under a revolving credit facility
required to be computed on a pro forma basis in accordance with clause (x) of
Section 9.14 hereof shall be computed based upon the average daily balance of
such Indebtedness during the applicable period, provided that such average daily
balance shall be reduced by the amount of any repayment of Indebtedness under a
revolving credit facility during the applicable period, which repayment
permanently reduced the commitments or amounts available to be reborrowed under
such facility, (iii) notwithstanding clauses (i) and (ii) of this proviso,
interest on Indebtedness determined on a fluctuating basis, to the extent such
interest is covered by agreements relating to Interest Rate Protection
Obligations, shall be deemed to have accrued at the rate per annum resulting
after giving effect to the operation of such agreements and (iv) in making such
calculation, Consolidated Interest Expense shall exclude interest attributable
to Dollar-Denominated Production Payments.
"Consolidated Income Tax Expense" means, for any period, the provision for
federal, state, local and foreign income taxes (including franchise taxes based
on income) of the Company and its Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP.
7
"Consolidated Interest Expense" means, for any period, without duplication,
the sum of (a) the interest expense of the Company and its Restricted
Subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP, including, without limitation, (i) any amortization of debt discount,
(ii) the net cost under Interest Rate Protection Obligations (including any
amortization of discounts), (iii) the interest portion of any deferred payment
obligation, (iv) all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and (v) all
accrued interest, in each case to the extent attributable to such period, (b) to
the extent any Indebtedness of any Person (other than the Company or a
Restricted Subsidiary) that is guaranteed by the Company or any Restricted
Subsidiary is in default, the aggregate amount of interest paid or accrued by
such other Person during such period attributable to any such Indebtedness, in
each case to the extent attributable to that period, (c) the aggregate amount of
the interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by the Company and its Restricted Subsidiaries
during such period as determined on a consolidated basis in accordance with GAAP
and (d) the aggregate amount of dividends paid or accrued on Redeemable Capital
Stock of the Company and its Restricted Subsidiaries, to the extent such
Redeemable Capital Stock is owned by Persons other than Restricted Subsidiaries.
"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of the Company and its Restricted Subsidiaries for such period
as determined in accordance with GAAP, adjusted by excluding (a) net after-tax
extraordinary gains or losses (less all fees and expenses relating thereto), (b)
net after-tax effect of changes on or after January 1, 2001, in accounting
principles, (c) net after-tax gains or losses (less all fees and expenses
relating thereto) attributable to Asset Sales, (d) the net income (or net loss)
of any Person (other than the Company or any of its Restricted Subsidiaries or
any oil and gas royalty trust), in which the Company or any of its Restricted
Subsidiaries has an ownership interest, except to the extent of the amount of
dividends or other distributions actually paid to the Company or its Restricted
Subsidiaries in cash by such other Person during such period (regardless of
whether such cash dividends, distributions or interest on indebtedness is
attributable to net income (or net loss) of such Person during such period or
during any prior period), (e) the net income of any Restricted Subsidiary to the
extent that the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary is not at the date of determination permitted,
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, (f)
income resulting from transfers of assets received by the Company or any
Restricted Subsidiary from an Unrestricted Subsidiary, (g) any write-downs of
non-current assets; provided, however, that any ceiling limitation write-downs
under SEC guidelines shall be treated as capitalized costs, as if such
write-downs had not occurred and (h) any unrealized non-cash gains or losses in
respect of hedge or non-hedge derivatives (including those resulting from the
application of Financial Accounting Standards Board Statement No. 133).
"Consolidated Non-cash Charges" means, for any period, the aggregate
depreciation, depletion, amortization (including, without limitation,
amortization of capitalized debt issuance costs), impairment and other non-cash
expenses (including any exploration expense) of the Company and its Restricted
Subsidiaries reducing Consolidated Net Income for such period,
8
determined on a consolidated basis in accordance with GAAP (excluding any such
non-cash charge which requires an accrual of or reserve for cash charges for any
future period).
"Corporate Trust Office" means the principal corporate trust office of the
Trustee, at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Indenture is located
at 000 Xxxxxxx Xxxxxx, 0X, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust
Administration.
"Covenant Termination Date" has the meaning specified in Section 9.21.
"Default" means any event, act or condition that is, or after notice or
passage of time or both would be, an Event of Default.
"Depository" has the meaning specified in Section 1.1 of the Appendix.
"Disinterested Director" means, with respect to any transaction or series
of transactions in respect of which a Board Resolution of the Company is
required to be delivered under this Indenture, a member of the Board of
Directors of the Company who does not have any material direct or indirect
financial interest (other than an interest arising solely from the beneficial
ownership of Capital Stock of the Company) in or with respect to such
transaction or series of transactions.
"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations, rulings and
interpretations thereof issued by the Internal Revenue Service or the Department
of Labor thereunder.
"ERISA Affiliate" shall mean any subsidiary or trade or business (whether
or not incorporated) which is a member of a group of which the Company is a
member and which is under common control within the meaning of Section 414 of
the Code (such rules and regulations shall also be deemed to apply to foreign
corporations and entities).
"Event of Default" has the meaning specified in Section 4.1.
"Excess Proceeds" has the meaning specified in Section 9.16(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor act thereto.
"Exchange Notes" has the meaning specified in Section 1.1 of the Appendix.
9
"Existing Subordinated Notes" means all or any of the Company's 8 3/4%
Senior Subordinated Notes due 2009 issued in the original aggregate principal
amount of $175,000,000 and outstanding at the Issue Date.
"Fair Market Value" means the fair market value of a Property (including
Capital Stock) or Redeemable Capital Stock as determined by a Board Resolution
of the Company adopted in good faith, which determination shall be conclusive
for purposes of this Indenture; provided, however, that unless otherwise
specified herein, the Board of Directors shall be under no obligation to obtain
any valuation or assessment from any investment banker, appraiser or other third
party.
"Federal Bankruptcy Code" means the United States Bankruptcy Code of Title
11 of the United States Code, as amended from time to time.
"Funding Guarantor" has the meaning specified in Section 14.5.
"GAAP" means generally accepted accounting principles, consistently
applied, that are 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 may be approved by a significant
segment of the accounting profession of the United States of America, which are
applicable as of the date of this Indenture.
"Global Note" has the meaning specified in Section 2.1(a) of the Appendix.
"Guarantee" means, as applied to any obligation, (i) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of nonperformance) of all or any
part of such obligation, including, without limiting the foregoing, the payment
of amounts drawn down by letters of credit. When used as a verb, "guarantee"
shall have a corresponding meaning.
"Holder" means a Person in whose name a Note is registered in the Security
Register.
"Indebtedness" means, with respect to any Person, without duplication, (a)
all liabilities of such Person for borrowed money or for the deferred purchase
price of property or services, excluding any trade accounts payable and other
accrued current liabilities incurred in the ordinary course of business, but
including, without limitation, all obligations, contingent or otherwise, of such
Person in connection with any letters of credit, bankers' acceptance or other
similar credit transaction and in connection with any agreement to purchase,
redeem, exchange, convert or otherwise acquire for value any Capital Stock of
such Person, or any warrants, rights or options to acquire such Capital Stock,
now or hereafter outstanding, if, and to the extent, any of the foregoing would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, (b) all obligations of such Person evidenced by bonds, notes,
debentures
10
or other similar instruments, if, and to the extent, any of the foregoing would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, (c) all Indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade accounts payable arising in the ordinary
course of business, (d) all Capitalized Lease Obligations of such Person, (e)
the Attributable Indebtedness (in excess of any related Capitalized Lease
Obligations) related to any Sale/Leaseback Transaction of such Person (unless
such Sale/Leaseback Transaction has been entered into in reliance upon, and
complies with, clause (ii) of Section 9.19), (f) all Indebtedness referred to in
the preceding clauses of other Persons and all dividends of other Persons, the
payment of which is secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness (the amount of such obligation being deemed to be
the lesser of the value of such property or asset or the amount of the
obligation so secured), (g) all guarantees by such Person of Indebtedness
referred to in this definition (including, with respect to any Production
Payment, any warranties or guaranties of production or payment by such Person
with respect to such Production Payment but excluding other contractual
obligations of such Person with respect to such Production Payment), (h) all
Redeemable Capital Stock of such Person valued at the greater of its voluntary
or involuntary maximum fixed repurchase price plus accrued dividends, (i) all
net obligations of such Person under or in respect of currency exchange
contracts, Interest Rate Protection Obligations and Oil and Gas Hedging
Contracts and (j) any amendment, supplement, modification, deferral, renewal,
extension or refunding of any liability of such Person of the types referred to
in clauses (a) through (i) above. For purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on
any date on which Indebtedness shall be required to be determined pursuant to
this Indenture, and if such price is based upon, or measured by, the Fair Market
Value of such Redeemable Capital Stock, such Fair Market Value shall be
determined in good faith by the board of directors of the issuer of such
Redeemable Capital Stock, provided, however, that if such Redeemable Capital
Stock is not at the date of determination permitted or required to be
repurchased, the "maximum fixed repurchase price" shall be the book value of
such Redeemable Capital Stock. Subject to clause (g) of the first sentence of
this definition, neither Dollar-Denominated Production Payments nor Volumetric
Production Payments shall be deemed to be Indebtedness.
"Indenture" means this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Initial Notes" has the meaning specified in Section 1.1 of the Appendix.
"Insolvency or Liquidation Proceeding" means, with respect to any Person,
(a) an insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization
11
proceeding or other similar case or proceeding in connection therewith, relating
to such Person or to its creditors, as such, or its assets, (b) any liquidation,
dissolution or other winding-up of such Person, whether voluntary or
involuntary, or (c) any assignment for the benefit of creditors or any other
marshaling of assets and liabilities of such Person.
"Interest Payment Date" means, with respect to any Note, the Stated
Maturity of an installment of interest on the Note.
"Interested Person" has the meaning specified in Section 9.17.
"Interest Rate Protection Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and includes, without limitation, interest rate swaps, caps,
floors, collars and similar agreements or arrangements designed to protect
against or manage such Person's and any of its Subsidiaries' exposure to
fluctuations in interest rates.
"Investment" means, with respect to any Person, any direct or indirect
advance, loan, guarantee of Indebtedness or other extension of credit or capital
contribution to (by means of any transfer of cash or other property or assets to
others or any payment for property, assets or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities (including derivatives) or
evidences of Indebtedness issued by, any other Person. In addition, the Fair
Market Value of the net assets of any Restricted Subsidiary at the time that
such Restricted Subsidiary becomes an Unrestricted Subsidiary shall be deemed to
be an "Investment" made by the Company in such Unrestricted Subsidiary at such
time. "Investments" shall exclude (a) extensions of trade credit on commercially
reasonable terms in accordance with normal trade practices and (b) Interest Rate
Protection Obligations entered into in the ordinary course of business or as
required by any Permitted Indebtedness or any Indebtedness incurred in
compliance with Section 9.14 hereof, but only to the extent that the notional
principal amount of such Interest Rate Protection Obligations does not exceed
105% of the principal amount of such Indebtedness to which such Interest Rate
Protection Obligations relate and (c) bonds, notes, debentures or other
securities or evidences of Indebtedness received as a result of Asset Sales
permitted under Section 9.16 hereof.
"Investment Grade Rating" means a rating equal to or higher than Baa3 (or
the equivalent) by Moody's and equal to or higher than BBB- (or the equivalent)
by S&P.
"Issue Date" means the date of original issuance of the Initial Notes.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim, or preference
or priority or other encumbrance or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
agreement to give or xxxxx x Xxxx or any lease, conditional sale or other
12
title retention agreement having substantially the same economic effect as any
of the foregoing) upon or with respect to any property of any kind. A Person
shall be deemed to own subject to a Lien any property which such Person has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement.
"Liquid Securities" means securities of an issuer that is not an Affiliate
of the Company, that are publicly traded on a national securities exchange or
the Nasdaq Stock Market and upon which the Company does not have any selling
restrictions. The Company or any Restricted Subsidiary shall not be deemed to
have selling restrictions with respect to any securities under the Securities
Act if it has registration rights with respect to such securities.
"Make-Whole Amount" with respect to a Note means an amount equal to the
excess, if any, of (i) the present value of the remaining interest, premium and
principal payments due on such Note (excluding any portion of such payments of
interest accrued as of the Redemption Date), computed using a discount rate
equal to the Treasury Rate plus 50 basis points, over (ii) the outstanding
principal amount of such Note. As used herein, "Treasury Rate" is defined as the
yield to maturity (calculated on a semi-annual bond equivalent basis) at the
time of the computation of United States Treasury securities with a constant
maturity (as compiled by and published in the most recent Federal Reserve
Statistical Release H.15 (510), which has become publicly available at least two
Business Days prior to the date of the redemption notice or, if such Statistical
Release is no longer published, any publicly available source of similar market
data) most nearly equal to the then remaining maturity of the Notes; provided,
however, that if the Make-Whole Average Life of such Note is not equal to the
constant maturity of the 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 Make-Whole Average Life of such Note 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. As used
herein, "Make-Whole Average Life" means the number of years (calculated to the
nearest one-twelfth) between the Redemption Date and the Stated Maturity of the
Notes.
"Make-Whole Price" means the sum of the outstanding principal amount of the
Notes to be redeemed plus the Make-Whole Amount of such Notes.
"Maturity" means, with respect to any Note, the date on which any principal
of such Note becomes due and payable as provided therein or herein, whether at
the Stated Maturity with respect to such principal or by declaration of
acceleration, call for redemption or purchase or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, Section 414 of the Code or Section 3(37) of ERISA
(or any similar type of plan established or regulated under the laws of any
foreign country) to which the Company or
13
any ERISA Affiliate is making or accruing or has made or accrued an obligation
to make contributions.
"Multiple Employer Plan" shall mean any employee benefit plan within the
meaning of Section 3(3) of ERISA, other than a Multiemployer Plan, subject to
Title IV of ERISA, to which the Company or any ERISA Affiliate and an employer
other than an ERISA Affiliate or the Company contribute and which is subject to
Section 4064 of ERISA.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of cash or Cash
Equivalents (except to the extent that such obligations are financed or sold
with recourse to the Company or any Restricted Subsidiary), net of (a) brokerage
commissions and other fees and expenses (including fees and expenses of legal
counsel and investment banks) related to such Asset Sale, (b) provisions for all
taxes payable as a result of such Asset Sale, (c) amounts required to be paid to
any Person (other than the Company or any Restricted Subsidiary) owning a
beneficial interest in the assets subject to the Asset Sale and (d) appropriate
amounts to be provided by the Company or any Restricted Subsidiary, as the case
may be, as a reserve required in accordance with GAAP consistently applied
against any liabilities associated with such Asset Sale and retained by the
Company or any Restricted Subsidiary, as the case may be, after such Asset Sale,
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an Officers' Certificate delivered to the Trustee; provided,
however, that any amounts remaining after adjustments, revaluations or
liquidations of such reserves shall constitute Net Cash Proceeds.
"Net Proceeds Deficiency" has the meaning specified in Section 9.16(c).
"Net Proceeds Offer" has the meaning specified in Section 9.16(c).
"Net Working Capital" means (a) all current assets of the Company and its
Restricted Subsidiaries, minus (b) all current liabilities of the Company and
its Restricted Subsidiaries, except current liabilities included in
Indebtedness, in each case as set forth in financial statements of the Company
prepared in accordance with GAAP.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of the Company or a Restricted Subsidiary incurred in connection
with the acquisition by the Company or a Restricted Subsidiary of any property
or assets and as to which (a) the holders of such Indebtedness agree that they
will look solely to the property and assets so acquired and securing such
Indebtedness for payment on or in respect of such Indebtedness and (b) no
default with respect to such Indebtedness would permit (after notice, passage of
time or both), according to the terms thereof, any holder of any other
Indebtedness of the Company or its Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity.
14
"Notes" has the meaning specified in Section 1.1 of the Appendix. For
purposes of this Indenture, the term "Notes" shall, except where the context
otherwise requires, include the Subsidiary Guarantees, if any.
"Note Obligations" means any principal of, premium, if any, and interest
on, and any other amounts (including, without limitation, any payment
obligations with respect to the Notes as a result of any Asset Sale, Change of
Control or redemption) owing in respect of, the Notes payable pursuant to the
terms of the Notes or this Indenture or upon acceleration of the Notes.
"Offered Price" has the meaning specified in Section 9.16(c).
"Officer" means, with respect to any Person, the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer or the Treasurer of
such Person.
"Officers' Certificate" means a certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Oil and Gas Business" means (a) the acquisition, exploration, development,
operation and disposition of interests in oil, gas and other hydrocarbon
Properties, (b) the gathering, marketing, treating, processing, storage,
refining, selling and transporting of any production from such interests or
Properties, (c) any business relating to or arising from exploration for or
development, production, treatment, processing, storage, refining,
transportation or marketing of oil, gas and other minerals and products produced
in association therewith, and (d) any activity necessary, appropriate or
incidental to the activities described in the foregoing clauses (a) through (c)
of this definition.
"Oil and Gas Hedging Contracts" means any agreements or arrangements that
are designed to provide protection against price fluctuations of oil, natural
gas or other commodities.
"Oil and Gas Property" means any Property or interest in Property used or
useful in the Oil and Gas Business.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, including an employee of the Company, and who shall be
reasonably acceptable to the Trustee.
"Outstanding," when used with respect to Notes, means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(a) Notes theretofore canceled by the Trustee or delivered to the Trustee
for cancellation;
(b) Notes, for whose payment or redemption money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or
15
set aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of Notes; provided that, if the Notes are
to be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(c) Notes, except to the extent provided in Sections 11.2 and 11.3, with
respect to which the Company has effected defeasance and/or covenant defeasance
as provided in Article XI; and
(d) Notes which have been paid pursuant to Section 2.7 or in exchange for
or in lieu of which other Notes have been authenticated and delivered pursuant
to this Indenture, other than any such Notes in respect of which there shall
have been presented to the Trustee proof satisfactory to it that such Notes are
held by a bona fide purchaser in whose hands the Notes are valid obligations of
the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company
or such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in making
such calculation or in relying upon any such request, demand, authorization,
direction, consent, notice or waiver, only Notes which a Responsible Officer of
the Trustee actually knows to be so owned shall be so disregarded. Any Notes so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Company or
any other obligor upon the Notes or any Affiliate of the Company or such other
obligor.
"Pari Passu Indebtedness" means any Indebtedness of the Company that is
pari passu in right of payment to the Notes.
"Pari Passu Indebtedness Amount" has the meaning specified in Section
9.16(c).
"Pari Passu Offer" has the meaning specified in Section 9.16(c).
"Paying Agent" has the meaning specified in Section 2.3.
"Payment Amount" has the meaning specified in Section 9.16(c).
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PBGC Plan" shall mean any employee pension benefit plan as defined in
Section 3(2) of ERISA sponsored by the Company or an ERISA Affiliate (excluding
any Multiemployer Plan and any Multiple Employer Plan) and which is subject to
Title IV of ERISA or Section 412 of the Code.
16
"Permitted Indebtedness" means any of the following:
(a) Indebtedness of the Company under one or more bank credit or revolving
credit facilities in an aggregate principal amount at any one time outstanding
under this clause (a) not to exceed the greater of (i) $850 million and (ii) an
amount equal to the sum of (A) $400 million and (B) 25% of Adjusted Consolidated
Net Tangible Assets determined as of the date of the incurrence of such
Indebtedness (plus interest and fees under such facilities), less any amounts
derived from Asset Sales and applied to the required permanent reduction of Pari
Passu Indebtedness (and a permanent reduction of the related commitment to lend
or amount available to be reborrowed in the case of a revolving credit facility)
under such credit facilities as contemplated by Section 9.16(b)(i) (the "Maximum
Credit Amount") (with the Maximum Credit Amount to be an aggregate maximum
amount for the Company and all Restricted Subsidiaries, pursuant to clause (a)
of the definition of "Permitted Subsidiary Indebtedness"), and any renewals,
amendments, extensions, supplements, modifications, deferrals, refinancings or
replacements (each, for purposes of this clause, a "refinancing") thereof by the
Company, including any successive refinancings thereof by the Company, so long
as the aggregate principal amount of any such new Indebtedness, together with
the aggregate principal amount of all other Indebtedness outstanding pursuant to
this clause (a) (and clause (a) of the definition of "Permitted Subsidiary
Indebtedness"), shall not at any one time exceed the Maximum Credit Amount;
(b) Indebtedness of the Company under the Notes issued on the Issue Date or
any Exchange Notes;
(c) Indebtedness of the Company outstanding on the date of this Indenture
(and not repaid or defeased with the proceeds of the Notes);
(d) obligations of the Company pursuant to Interest Rate Protection
Obligations, but only to the extent such obligations do not exceed 105% of the
aggregate principal amount of the Indebtedness covered by such Interest Rate
Protection Obligations; and obligations under currency exchange contracts and
Oil and Gas Hedging Contracts entered into in the ordinary course of business;
(e) Indebtedness of the Company to any Restricted Subsidiaries;
(f) in-kind obligations relating to net gas balancing positions arising in
the ordinary course of business and consistent with past practice;
(g) Indebtedness in respect of bid, performance or surety bonds issued for
the account of the Company or any Restricted Subsidiary in the ordinary course
of business, including guarantees and letters of credit supporting such bid,
performance, surety or other reimbursement obligations (in each case other than
an obligation for money borrowed);
17
(h) any renewals, extensions, substitutions, refinancings or replacements
(each, for purposes of this clause, a "refinancing") by the Company of any
Indebtedness of the Company incurred in compliance with clauses (i) and (ii) of
the proviso to the first sentence of Section 9.14 or pursuant to clause (b),
(c), (h) or (j) of this definition, including any successive refinancings by the
Company, so long as (i) any such new Indebtedness shall be in a principal amount
that does not exceed the principal amount (or, if such Indebtedness being
refinanced provides for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration thereof, such lesser amount
as of the date of determination) so refinanced plus the amount of any premium
required to be paid in connection with such refinancing pursuant to the terms of
the Indebtedness refinanced or the amount of any premium reasonably determined
by the Company as necessary to accomplish such refinancing, plus the amount of
expenses of the Company incurred in connection with such refinancing, and (ii)
in the case of any refinancing of Subordinated Indebtedness, such new
Indebtedness is made subordinate to the Notes at least to the same extent as the
Indebtedness being refinanced and (iii) such new Indebtedness has an Average
Life equal to or longer than the Average Life of the Indebtedness being
refinanced and a final Stated Maturity equal to or later than the final Stated
Maturity of the Indebtedness being refinanced;
(i) Non-Recourse Indebtedness;
(j) Purchase Money Indebtedness of the Company in an aggregate principal
amount (when added to (1) all refinancings thereof pursuant to clause (h) of
this definition plus (2) Purchase Money Indebtedness incurred by all Restricted
Subsidiaries pursuant to clause (k) of the definition of Permitted Subsidiary
Indebtedness and all refinancings thereof pursuant to clause (l) of such
definition) not in excess of $50,000,000 at any one time outstanding; and
(k) other Indebtedness of the Company in an aggregate principal amount not
in excess of $50,000,000 at any one time outstanding.
"Permitted Investments" means any of the following: (a) Investments in Cash
Equivalents; (b) Investments in the Company or any of its Restricted
Subsidiaries; (c) Investments in an amount not to exceed 10% of Adjusted
Consolidated Net Tangible Assets determined as of the date of the making or
incurrence of such Permitted Investment at any one time outstanding; (d)
Investments by the Company or any of its Restricted Subsidiaries in another
Person, if as a result of such Investment (i) such other Person becomes a
Restricted Subsidiary of the Company or (ii) such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all of
its assets to, the Company or a Restricted Subsidiary; (e) entry into operating
agreements, joint ventures, partnership agreements, limited liability company
agreements, working interests, royalty interests, mineral leases, processing
agreements, farm-out agreements, contracts for the sale, transportation or
exchange of oil and natural gas, unitization agreements, pooling arrangements,
area of mutual interest agreements or other similar or customary agreements,
transactions or arrangements, and Investments, contributions of Property 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; (f) entry into
any Oil and Gas Hedging Contracts in the ordinary course of business; (g)
Investments in Capital
18
Stock of any oil and gas royalty trust; (h) entry into a joint venture or
partnership agreement in connection with ownership and operation of office and
building real estate and related assets owned by the Company or any Restricted
Subsidiary and contribution of such assets to such entity; or (i) loans and
advances to employees of the Company or any Restricted Subsidiary in an amount
not to exceed $2,000,000 at any one time outstanding.
"Permitted Liens" means the following types of Liens:
(a) Liens existing as of the Issue Date;
(b) Liens securing the Notes;
(c) Liens in favor of the Company or a Subsidiary Guarantor;
(d) Liens securing refinancings, as defined in clause (h) of the definition
of Permitted Indebtedness of secured Indebtedness; provided that such Liens
extend only to cover the Property currently securing the Indebtedness being
refinanced;
(e) Liens for taxes, assessments and governmental charges or claims either
(i) not delinquent or (ii) contested in good faith by appropriate proceedings
and as to which the Company or its Restricted Subsidiaries shall have set aside
on their books such reserves as may be required pursuant to GAAP;
(f) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not delinquent or being
contested in good faith, if such reserve or other appropriate provision, if any,
as shall be required by GAAP shall have been made in respect thereof;
(g) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the payment or performance of tenders, statutory
or regulatory obligations, surety and appeal bonds, bids, leases, government
contracts and leases, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money but
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, federal or foreign lands or waters);
(h) judgment Liens not giving rise to an Event of Default so long as any
appropriate legal proceedings which 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;
19
(i) easements, rights-of-way, restrictions and other similar charges or
encumbrances not interfering in any material respect with the ordinary conduct
of the business of the Company or any of its Restricted Subsidiaries;
(j) any interest or title of a lessor under any Capitalized Lease
Obligation or operating lease;
(k) Liens resulting from the deposit of funds or evidences of Indebtedness
in trust for the purpose of defeasing Indebtedness of the Company or any of its
Restricted Subsidiaries;
(l) Liens securing obligations under Oil and Gas Hedging Contracts;
(m) Liens upon specific items of inventory or other goods and proceeds of
any Person securing such Person's obligations in respect of bankers' acceptances
issued or created for the account of such Person to facilitate the purchase,
shipment or storage of such inventory or other goods;
(n) 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;
(o) 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;
(p) 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;
(q) Liens securing Interest Rate Protection Obligations which Interest Rate
Protection Obligations relate to Indebtedness that is secured by Liens otherwise
permitted under this Indenture;
(r) Liens on, or related to, properties or assets to secure all or part of
the costs incurred in the ordinary course of business for the exploration,
drilling, development or operation thereof;
(s) Liens on pipeline or pipeline facilities which arise out of operation
of law;
(t) Liens arising under operating agreements, joint venture agreements,
partnership agreements, oil and gas leases, farm-out agreements, division
orders, contracts for the sale, transportation or exchange of oil and natural
gas, unitization and pooling declarations and agreements, area of mutual
interest agreements and other agreements which are customary in the Oil and Gas
Business;
20
(u) Liens reserved in oil, gas and mineral leases for bonus or rental
payments, and for compliance with the terms of such leases;
(v) Liens constituting survey exceptions, encumbrances, easements, or
reservations of, or rights to others for, rights-of-way, zoning or other
restrictions as to the use of real properties, and minor defects of title which,
in the case of any of the foregoing, were not incurred or created to secure the
payment of borrowed money or the deferred purchase price of Property or
services, and in the aggregate do not materially adversely affect the value of
Property of the Company and the 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 any Restricted Subsidiaries;
(w) Liens securing Non-Recourse Indebtedness; provided, however, that the
related Non-Recourse Indebtedness shall not be secured by any property or assets
of the Company or any Restricted Subsidiary other than the property and assets
acquired by it with the proceeds of such Non-Recourse Indebtedness;
(x) Liens securing Indebtedness incurred under one or more bank credit or
revolving credit facilities in compliance with Section 9.14, including
Indebtedness incurred in accordance with clause (a) of the definition of
Permitted Indebtedness and/or clause (a) of the definition of Permitted
Subsidiary Indebtedness;
(y) (i) Liens upon any Property of any Person existing at the time of
acquisition thereof by the Company or a Restricted Subsidiary, (ii) Liens upon
any Property of a Person existing at the time such Person is merged or
consolidated with the Company or any Restricted Subsidiary or existing at the
time of the sale or transfer of any such Property of such Person to the Company
or any Restricted Subsidiary, or (iii) Liens upon any Property of a Person
existing at the time such Person becomes a Restricted Subsidiary; provided that
in each case such Lien has not been created in contemplation of such sale,
merger or consolidation, transfer or acquisition, and provided that, in each
such case no such Lien shall extend to or cover any Property of the Company or
any Restricted Subsidiary other than the Property being acquired and
improvements thereon;
(z) purchase money Liens granted or assumed in connection with the
acquisition of assets in the ordinary course of business and consistent with
past practices; provided, that (A) such Liens attach only to the property so
acquired with the Purchase Money Indebtedness secured thereby and (B) such Liens
secure only Indebtedness that is not in excess of 100% of the purchase price of
such assets;
(aa) other Liens of the Company that, at the date incurred, when taken
together with all other Liens theretofore incurred in reliance upon this clause
(aa), secure Indebtedness in an aggregate principal amount not in excess of 10%
of Adjusted Consolidated Net Tangible Assets; and
21
(bb) any Lien that is deemed to arise as a result of the sale or transfer
of a Production Payment that does not involve the creation of a guaranty of the
type described in clause (g) of the definition of "Indebtedness."
"Permitted Subsidiary Indebtedness" means any of the following:
(a) Indebtedness of any Restricted Subsidiary under one or more bank credit
or revolving credit facilities (and "refinancings" thereof) in an amount at any
one time outstanding not to exceed the Maximum Credit Amount (in the aggregate
for all Restricted Subsidiaries and the Company, pursuant to clause (a) of the
definition of "Permitted Indebtedness");
(b) Indebtedness of any Restricted Subsidiary outstanding on the Issue
Date;
(c) obligations of any Restricted Subsidiary pursuant to Interest Rate
Protection Obligations, but only to the extent such obligations do not exceed
105% of the aggregate principal amount of the Indebtedness covered by such
Interest Rate Protection Obligations, and obligations under any Oil and Gas
Hedging Contracts that any Restricted Subsidiary enters into in the ordinary
course of business;
(d) the Subsidiary Guarantees (and any assumption of the obligations
guaranteed thereby);
(e) Indebtedness of any Restricted Subsidiary relating to guarantees by
such Restricted Subsidiary of Permitted Indebtedness pursuant to clause (a) of
the definition of "Permitted Indebtedness;"
(f) in-kind obligations relating to net gas balancing positions arising in
the ordinary course of business and consistent with past practice;
(g) Indebtedness in respect of bid, performance or surety bonds or other
reimbursement obligations issued for the account of any Restricted Subsidiary in
the ordinary course of business, including guarantees and letters of credit
supporting such bid, performance, surety bonds or other reimbursement
obligations (in each case other than for an obligation for money borrowed);
(h) Indebtedness of any Restricted Subsidiary to any other Restricted
Subsidiary or to the Company;
(i) Indebtedness relating to guarantees by any Restricted Subsidiary
permitted to be incurred pursuant to Section 9.12(a) hereof;
(j) Non-Recourse Indebtedness;
(k) Purchase Money Indebtedness of any Restricted Subsidiary in an
aggregate principal amount (when added to (1) Purchase Money Indebtedness of all
other Restricted
22
Subsidiaries under this clause (k) and all refinancings thereof pursuant to
clause (l) of this definition plus (2) Purchase Money Indebtedness of the
Company under clause (j) of the definition of Permitted Indebtedness and all
refinancings thereof pursuant to clause (h) of such definition) not in excess of
$50,000,000 at any one time outstanding;
(l) any renewals, extensions, substitutions, refinancings or replacements
(each, for purposes of this clause, a "refinancing") by any Restricted
Subsidiary of any Indebtedness of such Restricted Subsidiary incurred in
compliance with clauses (i) and (ii) of the proviso to the first sentence of
Section 9.14 or pursuant to clause (b) or (k) of this definition, including any
successive refinancings by such Restricted Subsidiary, so long as (i) any such
new Indebtedness shall be in a principal amount that does not exceed the
principal amount (or, if such Indebtedness being refinanced provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration thereof, such lesser amount as of the date of
determination) so refinanced plus the amount of any premium required to be paid
in connection with such refinancing pursuant to the terms of the Indebtedness
refinanced or the amount of any premium reasonably determined by such Restricted
Subsidiary as necessary to accomplish such refinancing, plus the amount of
expenses of such Restricted Subsidiary incurred in connection with such
refinancing and (ii) such new Indebtedness has an Average Life equal to or
longer than the Average Life of the Indebtedness being refinanced and a final
Stated Maturity equal to or later than the final Stated Maturity of the
Indebtedness being refinanced; and
(m) other Indebtedness of the Restricted Subsidiaries in an aggregate
principal amount not in excess of $50,000,000 at any one time outstanding.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Notes" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.7 hereof in exchange for a mutilated
Note or in lieu of a lost, destroyed or stolen Note shall be deemed to evidence
the same debt as the mutilated, lost, destroyed or stolen Note.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's preferred or preference stock, whether now outstanding or issued after
the date of this Indenture, including, without limitation, all classes and
series of preferred or preference stock of such Person.
"Private Exchange Notes" has the meaning specified in Section 1.1 of the
Appendix.
"Production Payments" means, collectively, Dollar-Denominated Production
Payments and Volumetric Production Payments.
23
"Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including, without limitation, Capital Stock in any other Person.
"Public Market" exists at any time with respect to the Qualified Capital
Stock of the Company if such Qualified Capital Stock of the Company is then (a)
registered with the Commission pursuant to Section 12(b) or 12(g) of the
Exchange Act and (b) traded either on a national securities exchange or on the
Nasdaq Stock Market.
"Purchase Money Indebtedness" means Indebtedness incurred in connection
with the purchase of assets in the ordinary course of business; provided that
such Indebtedness is incurred within 180 days of the purchase of such assets and
the principal amount thereof does not exceed 100% of the purchase price of the
assets acquired.
"Purchase Notice" has the meaning set forth in Section 9.16(c).
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
"Qualified Redemption Transaction" means a call for redemption of any
Capital Stock or Subordinated Indebtedness (including any Subordinated
Indebtedness accounted for as a minority interest of the Company that is held by
a Subsidiary that is a business trust or similar entity formed for the primary
purpose of issuing preferred securities the proceeds of which are loaned to the
Company or a Restricted Subsidiary) that by its terms is convertible into Common
Stock of the Company if on the date of notice of such call for redemption (a) a
Public Market exists in the shares of Common Stock of the Company and (b) the
average closing price on the Public Market for shares of Common Stock of the
Company for the twenty trading days immediately preceding the date of such
notice exceeds 120% of the conversion price per share of Common Stock of the
Company issuable upon conversion of the Capital Stock or Subordinated
Indebtedness called for redemption.
"Rating Agency" means each of S&P and Xxxxx'x, or if S&P or Xxxxx'x or both
shall not make a rating on the Notes publicly available, a nationally recognized
statistical rating agency or agencies, as the case may be, selected by the
Company (as evidenced by a Board Resolution of the Board of Directors of the
Company) which shall be substituted for S&P or Xxxxx'x, or both, as the case may
be.
"Redeemable Capital Stock" means any class or series of Capital Stock that,
either by its terms, by the terms of any security into which it is convertible
or exchangeable or by contract or otherwise, is, or upon the happening of an
event or passage of time would be, required to be redeemed prior to 91 days
after the final Stated Maturity of the Notes or is redeemable at the option of
the holder thereof at any time prior to 91 days after such final Stated
Maturity, or is convertible into or exchangeable for debt securities at any time
prior to 91 days after such final Stated Maturity.
24
"Redemption Date," when used with respect to any Note to be redeemed, in
whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registrar" or "Securities Registrar" has the meaning specified in Section
2.3.
"Registration Rights Agreement" has the meaning specified in Section 1.1 of
the Appendix.
"Regular Record Date" for the interest payable on any Interest Payment Date
means April 1 or October 1 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date.
"Reportable Event" shall mean any event described in Section 4043
(excluding subsections (b)(7) and (b)(9)) of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the provision for
thirty-day notice to the PBGC under such regulations).
"Responsible Officer," when used with respect to the Trustee, means any
vice president, any assistant vice president, any senior trust officer, any
trust officer or assistant trust officer in the corporate trust department 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 Payment" has the meaning specified in Section 9.13.
"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on or after the date of this Indenture, unless such Subsidiary of the
Company is an Unrestricted Subsidiary.
"S&P" means Standard and Poor's, a division of The XxXxxx-Xxxx Companies,
Inc., and its successors.
"Sale/Leaseback Transaction" means, with respect to any Person, any direct
or indirect arrangement pursuant to which properties or assets (except in the
case of the Company or any Restricted Subsidiary, any interest in any building
or buildings used or intended for use as a corporate headquarters for the
Company and its Subsidiaries) are sold or transferred by such Person or a
Subsidiary of such Person and are thereafter leased back from the purchaser or
transferee thereof by such Person or one of its Subsidiaries.
"Securities Act" means the Securities of 1933, as amended, and any
successor statute.
"Securities Custodian" has the meaning specified in Section 1.1 of the
Appendix.
25
"Security Register" has the meaning specified in Section 2.3.
"Stated Maturity" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable, and, when used with respect to any other Indebtedness or any
installment of interest thereon, means the date specified in the instrument
evidencing or governing such Indebtedness as the fixed date on which the
principal of such Indebtedness or such installment of interest is due and
payable.
"Subordinated Indebtedness" means Indebtedness of the Company that is
expressly subordinated in right of payment to the Notes, including the Existing
Subordinated Notes..
"Subsidiary" means, with respect to any Person, (a) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
such Person, by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (b) any other Person (other than a
corporation), including, without limitation, a joint venture or any oil and gas
royalty trust, in which such Person, one or more Subsidiaries thereof or such
Person and one or more Subsidiaries thereof, directly or indirectly, at the date
of determination thereof, has at least majority ownership interest entitled to
vote in the election of directors, managers or trustees thereof (or other Person
performing similar functions).
"Subsidiary Guarantee" means any guarantee of the Notes by (i) any
Subsidiary Guarantor in accordance with the provisions of Section 14.1 hereof
and (ii) any Restricted Subsidiary in accordance with the provisions of Section
9.12.
"Subsidiary Guarantor" means (a) each of the Company's Restricted
Subsidiaries that becomes a guarantor of the Notes in compliance with the
provisions of Section 9.12 or Section 14.1 hereof and (b) each of the Company's
Subsidiaries executing a supplemental indenture in which such Subsidiary agrees
to be bound by the terms of this Indenture and to guarantee the payment of the
Notes pursuant to the provisions of Article XIV hereof.
"Surviving Entity" has the meaning specified in Section 7.1(a).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and in force at the date as of which this Indenture was executed, except
as provided in Section 8.5.
"Terminated Covenants" has the meaning specified in Section 9.21.
"Trigger Date" has the meaning specified in Section 9.16(c).
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
26
"Uniform Commercial Code" means the New York Uniform Commercial Code as in
effect from time to time.
"Unrestricted Subsidiary" means (a) any Subsidiary of the Company that at
the time of determination will be designated an Unrestricted Subsidiary by the
Board of Directors of the Company as provided below, Hugoton Royalty Trust and
any other oil and gas royalty trust Subsidiary of the Company that meets the
criteria set forth in clauses (i) through (iv) of the second sentence of this
definition, and (b) any Subsidiary of an Unrestricted Subsidiary. The Board of
Directors of the Company may designate any Subsidiary of the Company as an
Unrestricted Subsidiary so long as (i) neither the Company nor any Restricted
Subsidiary is directly or indirectly liable pursuant to the terms of any
Indebtedness of such Subsidiary, (ii) no default with respect to any
Indebtedness of such Subsidiary would permit (upon notice, lapse of time or
otherwise) any holder of any other Indebtedness of the Company or any Restricted
Subsidiary to declare a default on such other Indebtedness or cause the payment
thereof to be accelerated or payable prior to its stated maturity, (iii) neither
the Company nor any Restricted Subsidiary has made an Investment in such
Subsidiary unless such Investment was made pursuant to, and in accordance with,
Section 9.13 hereof (other than Investments of the type described in clause (d)
of the definition of Permitted Investments), and (iv) such designation shall not
result in the creation or imposition of any Lien on any of the Properties of the
Company or any Restricted Subsidiary (other than any Permitted Lien or any Lien
the creation or imposition of which shall have been in compliance with Section
9.10 hereof); provided, however, that with respect to clause (i), the Company or
a Restricted Subsidiary may be liable for Indebtedness of an Unrestricted
Subsidiary if (A) such liability constituted a Permitted Investment or a
Restricted Payment permitted by Section 9.13 hereof, in each case at the time of
incurrence, or (B) the liability would be a Permitted Investment at the time of
designation of such Subsidiary as an Unrestricted Subsidiary. Any such
designation by the Board of Directors of the Company shall be evidenced to the
Trustee by filing a Board Resolution with the Trustee giving effect to such
designation. The Board of Directors of the Company may designate any
Unrestricted Subsidiary as a Restricted Subsidiary if, immediately after giving
effect to such designation, (x) no Default or Event of Default shall have
occurred and be continuing, (y) the Company could incur $1.00 of additional
Indebtedness (not including the incurrence of Permitted Indebtedness) under the
first paragraph of Section 9.14 hereof and (z) if any of the Properties of the
Company or any of its Restricted Subsidiaries would upon such designation become
subject to any Lien (other than a Permitted Lien), the creation or imposition of
such Lien shall have been in compliance with Section 9.10 hereof.
"U.S. Government Obligations" has the meaning specified in Section 11.4(a).
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
"Volumetric Production Payments" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
27
"Voting Stock" of a person means any class or classes of Capital Stock
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the board of directors,
managers or trustees of such Person (irrespective of whether or not, at the
time, stock of any other class or classes would have voting power by reason of
the happening of any contingency).
Section 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes and the Subsidiary Guarantees, if
any,
"indenture security holder" means a Holder,
"indenture to be qualified" means this Indenture,
"indenture trustee" or "institutional trustee" means the Trustee, and
"obligor" on the indenture securities means the Company, the Subsidiary
Guarantors, if any, or any other obligor on the Notes or the Subsidiary
Guarantees, if any.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.
Section 1.3 Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article or the Appendix have the meanings
assigned to them in this Article or the Appendix, as the case may be, and
include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(c) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; references to any Article, Section or Exhibit are
references to Articles, Sections and Exhibits in or to this Indenture unless
otherwise specified; and the term "including" embraces the words "without
limitation;"
28
(d) unless the context otherwise requires, the word "or" is not exclusive;
(e) provisions apply to successive events and transactions; and
(f) references to agreements and other instruments include subsequent
amendments and waivers but only to the extent not prohibited by this Indenture.
ARTICLE II
THE NOTES
Section 2.1 Form and Dating.
Provisions relating to the Initial Notes, the Private Exchange Notes and
the Exchange Notes are set forth in the Rule 144A/Regulation S Appendix attached
hereto (the "Appendix"), which is hereby incorporated in and expressly made part
of this Indenture. The Initial Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to the Appendix,
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Notes, the Private Exchange Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 to the
Appendix, which is hereby incorporated in and expressly made a part of this
Indenture. The Notes may have notations, legends or endorsements required by
law, stock exchange rules, agreements to which the Company is subject, if any,
or usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). Each Note shall be dated the date of its
authentication. The terms of the Notes set forth in the Appendix are part of the
terms of this Indenture.
Section 2.2 Execution and Authentication.
At least one Officer shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal may be impressed, affixed, imprinted or
reproduced on the Notes and, if the Company so elects, it may be in facsimile
form.
If an Officer whose signature is on a Note no longer holds that office at
the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
On the Issue Date, the Trustee shall authenticate and deliver $400 million
of Initial Notes, and, at any time and from time to time thereafter, the Trustee
shall authenticate and deliver Notes for original issue in an aggregate
principal amount specified in such order, in each case
29
upon a written order of the Company signed by two Officers or by an Officer and
either an Assistant Treasurer or an Assistant Secretary of the Company. Such
order shall specify the amount of the Notes to be authenticated and the date on
which the original issue of Notes is to be authenticated and, in the case of an
issuance of Additional Notes pursuant to Section 2.13 after the Issue Date,
shall certify that such issuance is in compliance with Section 9.14.
Prior to authentication and delivery of such Notes, and accepting the
additional responsibilities under this Indenture in relation to such Notes, the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon:
(i) an Officers' Certificate pursuant to Section 13.01 that all
conditions precedent provided for in this Indenture have been complied with; and
(ii) an Opinion of counsel stating:
(1) that such Notes, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and binding obligations of the Company enforceable in accordance with
their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other laws
relating to or affecting creditors' rights and by general principles
of equity; and
(2) that the execution and delivery by the Company of such Notes
does not violate any applicable law or legal requirement known to such
counsel.
The Trustee shall have the right to decline to authenticate and deliver any
Notes under this Section if the Trustee, being advised by counsel, determines
that such action may not lawfully be taken or if the Trustee in good faith shall
determine that such action would expose the Trustee to personal liability to
existing Holders.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as any Registrar, Paying Agent or agent for service of notices and
demands.
Section 2.3 Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange (the "Registrar" or "Securities
Registrar") and an office or agency where Notes may be presented for payment
(the "Paying Agent"). The Registrar shall
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keep a register of the Notes (the "Security Register") and of their transfer and
exchange. The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional paying
agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 5.6. The
Company or any Subsidiary may act as Paying Agent, Registrar, co-registrar or
transfer agent.
The Company initially appoints the Trustee as Registrar and Paying Agent in
connection with the Notes.
Section 2.4 Paying Agent to Hold Money in Trust.
Prior to 11:00 A.M., New York City time, on each due date of the principal
of, premium, if any, on and interest on any Note, the Company shall deposit with
the Paying Agent a sum sufficient to pay such principal, premium and interest
when so becoming due. The Company shall require each Paying Agent (other than
the Trustee) to agree in writing that the Paying Agent shall hold in trust for
the benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of, premium, if any, on or interest on the Notes and shall
notify the Trustee of any default by the Company in making any such payment. If
the Company or a Subsidiary acts as Paying Agent, it shall segregate the money
held by it as Paying Agent and hold it as a separate trust fund. The Company at
any time may require a Paying Agent to pay all money held by it to the Trustee
and to account for any funds disbursed by the Paying Agent. Upon complying with
this Section, the Paying Agent shall have no further liability for the money
delivered to the Trustee.
Section 2.5 Noteholder 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
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee, in writing at least five Business Days before each interest payment
date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Holders.
Section 2.6 Transfer and Exchange.
The Notes shall be issued in registered form and shall be transferable only
upon the surrender of a Note for registration of transfer. When a Note is
presented to the Registrar or a
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co-registrar with a written request to register a transfer, the Registrar shall
register the transfer as requested if the requirements of this Indenture and
Section 8-401(a) of the Uniform Commercial Code are met. When Notes are
presented to the Registrar or a co-registrar with a request to exchange them for
an equal principal amount of Notes of other denominations, the Registrar shall
make the exchange as requested if the same requirements are met.
Section 2.7 Replacement Notes.
If a mutilated Note is surrendered to the Registrar or if the Holder of a
Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the
requirements of Section 8-405 of the Uniform Commercial Code are met and the
Holder satisfies any other reasonable requirements of the Trustee. If required
by the Trustee or the Company, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from
any loss which any of them may suffer if a Note is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company.
The provisions of this Section 2.7 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement of
mutilated, lost, destroyed or wrongfully taken Notes.
Section 2.8 Outstanding Notes.
Notes outstanding at any time shall be those that satisfy the definition of
Outstanding set forth in Section 1.1 hereof.
Section 2.9 Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Notes
and deliver them in exchange for temporary Notes.
Section 2.10 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel and dispose of, in accordance with its
customary procedures (subject to the record retention requirements of the
Exchange Act), all Notes surrendered for registration of transfer, exchange,
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payment or cancellation unless the Company directs the Trustee to deliver
canceled Notes to the Company. Upon written request from the Company, the
Trustee will deliver to the Company a certificate of disposition of canceled
Notes. The Company may not issue new Notes to replace Notes it has redeemed,
paid or delivered to the Trustee for cancellation.
Section 2.11 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, the Company
shall pay defaulted interest (plus interest on such defaulted interest to the
extent lawful) in any lawful manner. The Company may pay the defaulted interest
to the persons who are Holders on a subsequent special record date. The Company
shall fix or cause to be fixed any such special record date and payment date to
the reasonable satisfaction of the Trustee and shall promptly mail to each
Holder a notice that states the special record date, the payment date and the
amount of defaulted interest to be paid.
Section 2.12 CUSIP Numbers.
The Company in issuing the Notes may use numbers assigned by the Committee
on Uniform Securities Identification Procedures ("CUSIP") and corresponding
International Notes Identification Numbers ("ISIN") (if then generally in use)
and, if so, the Trustee shall use CUSIP numbers and corresponding ISINs (if then
generally in use) in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
shall promptly notify the Trustee of any change in the CUSIP or ISIN numbers.
Section 2.13 Issuance of Additional Notes .
The Company shall be entitled, subject to its compliance with Section 9.14,
to issue Additional Notes under this Indenture which shall have identical terms
as the Initial Notes issued on the Issue Date, other than with respect to the
date of issuance and issue price. The Initial Notes issued on the Issue Date,
any Additional Notes and all Exchange Notes or Private Exchange Notes issued in
exchange therefor shall be treated as a single class for all purposes under this
Indenture.
With respect to any Additional Notes, the Company shall set forth in a
resolution of the Board of Directors and an Officers' Certificate, a copy of
each which shall be delivered to the Trustee, the following information:
(1) the aggregate principal amount of such Additional Notes to be
authenticated and delivered pursuant to this Indenture;
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(2) the issue price, the issue date and the CUSIP number of such
Additional Notes; provided, however, that no Additional Notes may be
issued at a price that would cause such Additional Notes to have
"original issue discount" within the meaning of Section 1273 of the
Code; and
(3) whether such Additional Notes shall be Transfer Restricted Notes and
issued in the form of Initial Notes as set forth in Exhibit 1 to the
Appendix or shall be issued in the form of Exchange Notes as set forth
in Exhibit A-1 to the Appendix.
ARTICLE III
SATISFACTION AND DISCHARGE
Section 3.1 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of the
Notes, as expressly provided for in this Indenture and the Note), and upon
payment of all amounts due the Trustee under Section 5.6, the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture when:
(a) either
(i) all Notes theretofore authenticated and delivered (other than (A)
Notes which have been mutilated, destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.7 and (B) Notes for whose
payment money or United States governmental obligations of the type
described in clause (a) of the definition of Cash Equivalents whose
maturity is not later than the Stated Maturity of principal of and
remaining interest on such Notes has theretofore been deposited in trust
with the Trustee or any Paying Agent or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust,
as provided in Section 9.3) have been delivered to the Trustee for
cancellation, or
(ii) all Notes not theretofore delivered to the Trustee for
cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity within
one year, or
(C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
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and the Company, in the case of (ii)(A), (ii)(B) or (ii)(C) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount in the currency in
which the Notes are denominated sufficient to pay and discharge the
entire indebtedness on such Notes not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Notes which have
become due and payable) or to the Stated Maturity or Redemption Date,
as the case may be, together with instructions from the Company
irrevocably directing the Trustee to apply such funds to the payment
thereof at maturity or redemption, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each satisfactory in form to the Trustee, which, taken
together, state that all conditions precedent herein relating to the
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 5.6 shall survive and,
if money shall have been deposited with the Trustee pursuant to subclause (B) of
clause (a)(i) of this Section, the obligations of the Trustee under Section 3.2
and the last paragraph of Section 9.3 shall survive.
Section 3.2 Application of Trust Money.
Subject to the provisions of the last paragraph of Section 9.3, all money
deposited with the Trustee pursuant to Section 3.1 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
Section 3.3 Repayment to Company.
The Trustee and the Paying Agent shall promptly turn over to the Company
upon Company Request any excess money or securities held by them at any time.
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ARTICLE IV
REMEDIES
Section 4.1 Events of Default.
"Event of Default," wherever used herein with respect to the Notes, means
any one of the following events (whatever the reason for such Event of Default
and whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(a) default in the payment of the principal of or premium, if any, on any
of the Notes, whether such payment is due at Stated Maturity, xxxx xxxxxxxxxx,
xxxx xxxxxxxxxx pursuant to a Change of Control Offer or a Net Proceeds Offer,
upon acceleration or otherwise; or
(b) default in the payment of any installment of interest on any of the
Notes, when it becomes due and payable, and the continuance of such default for
a period of 30 days; or
(c) default in the performance or breach of the provisions of Article VII
hereof, the failure to make or consummate a Change of Control Offer in
accordance with Section 9.15 hereof or the failure to make or consummate a Net
Proceeds Offer in accordance with the provisions of Section 9.16 hereof; or
(d) the Company or any Subsidiary Guarantor shall fail to perform or
observe any other term, covenant or agreement (not theretofore terminated
pursuant to Section 9.21 hereof) contained in the Notes, any Subsidiary
Guarantee or this Indenture (other than a default specified in (a), (b) or (c)
above) for a period of 30 days after written notice of such failure requiring
the Company to remedy the same shall have been given (i) to the Company by the
Trustee or (ii) to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Notes then Outstanding; or
(e) the occurrence and continuation beyond any applicable grace period of
any default in the payment of the principal of (or premium, if any, on) or
interest on any Indebtedness of the Company (other than the Notes) or any
Restricted Subsidiary for money borrowed when due, or any other default causing
acceleration of any Indebtedness of the Company or any Restricted Subsidiary for
money borrowed; provided that the aggregate principal amount of such
Indebtedness shall exceed $10,000,000; provided further that if any such default
is cured or waived or any such acceleration rescinded, or such debt is repaid,
within a period of 10 days from the continuation of such default beyond the
applicable grace period or the occurrence of such acceleration, as the case may
be, such Event of Default under this Indenture and any consequential
acceleration of the Notes shall be automatically rescinded, so long as such
rescission does not conflict with any judgment or decree; or
36
(f) the commencement of proceedings, or the taking of any enforcement
action (including by way of set-off), by any holder of at least $10,000,000 in
aggregate principal amount of Indebtedness of the Company or any Restricted
Subsidiary, after a default under such Indebtedness, to retain in satisfaction
of such Indebtedness or to collect or seize, dispose of or apply in satisfaction
of such Indebtedness, property or assets of the Company or any Restricted
Subsidiary having a Fair Market Value in excess of $10,000,000 individually or
in the aggregate; provided that if any such proceedings or actions are
terminated or rescinded, or such Indebtedness is repaid, such Event of Default
under this Indenture and any consequential acceleration of the Securities shall
be automatically rescinded, so long as (i) such rescission does not conflict
with any judgment or decree and (ii) the holder of such Indebtedness shall not
have applied any such property or assets in satisfaction of such Indebtedness;
or
(g) any Subsidiary Guarantee shall for any reason cease to be, or be
asserted by the Company or any Subsidiary Guarantor, as applicable, not to be,
in full force and effect, enforceable in accordance with its terms (except
pursuant to the release of any such Subsidiary Guarantee in accordance with this
Indenture); or
(h) if (i) any material "accumulated funding deficiency" (as defined in
Section 302 of ERISA or Section 412 of the Code), shall exist with respect to
any PBGC Plan or Multiple Employer Plan (unless a waiver or extension is
obtained under Section 412(d) or (e) of the Code and Sections 303 and 304 of
ERISA), if such accumulated funding deficiency would give rise to a material
liability of the Company, (ii) a Reportable Event shall occur with respect to
any PBGC Plan or Multiple Employer Plan, which Reportable Event is likely to
result in the termination of such PBGC Plan or Multiple Employer Plan for
purposes of Title IV of ERISA and to give rise to a material liability of the
Company, (iii) proceedings to have a trustee appointed shall commence, or a
trustee shall be appointed to terminate or administer a PBGC Plan or Multiple
Employer Plan, which proceeding is likely to result in the termination of such
PBGC Plan or Multiple Employer Plan and to give rise to a material liability of
the Company with respect to such termination, (iv) a notice of intent to
terminate a PBGC Plan or Multiple Employer Plan in a distress termination under
Section 4041(c) of ERISA is furnished to participants, (v) any Multiemployer
Plan is in reorganization or is insolvent and the circumstances are such that
such reorganization or insolvency will likely result in a material liability to
the Company, (vi) there is a complete or partial withdrawal from a Multiemployer
Plan under circumstances that would likely subject the Company to material
liability, or (vii) any event or condition described in (i) through (vi) above
(determined without regard to whether the event or condition taken alone would
or could result in a material liability) shall occur or exist with respect to a
PBGC Plan, Multiple Employer Plan or Multiemployer Plan which in combination
with one or more of any events described in (i) through (vi) above (determined
without regard to whether the event or condition taken alone would or could
result in a material liability) that has occurred or exists, would likely
subject the Company, any Subsidiary Guarantor or any other Restricted Subsidiary
to any material tax, penalty or other liability (for purposes of this paragraph
(h) the term "material" and "material liability" shall mean any tax, penalty or
liability in excess of $10,000,000); or
37
(i) final judgments or orders rendered against the Company or any
Restricted Subsidiary that are unsatisfied and that require the payment in
money, either individually or in an aggregate amount, that is more than
$10,000,000 over the coverage under applicable insurance policies and either (i)
commencement by any creditor of an enforcement proceeding upon such judgment
(other than a judgment that is stayed by reason of pending appeal or otherwise)
or (ii) the occurrence of a 60-day period during which a stay of such judgment
or order, by reason of pending appeal or otherwise, was not in effect; or
(j) the entry of a decree or order by a court having jurisdiction in the
premises (i) for relief in respect of the Company or any Restricted Subsidiary
in an involuntary case or proceeding under the Federal Bankruptcy Code or any
other applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or (ii) adjudging the Company or any Restricted Subsidiary
bankrupt or insolvent, or approving a petition seeking reorganization,
arrangement, adjustment or composition of the Company or a Restricted Subsidiary
under the Federal Bankruptcy Code or any other applicable federal or state law,
or appointing under any such law a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or any Subsidiary
Guarantor or any other Restricted Subsidiary or of a substantial part of their
consolidated assets, or ordering the winding up or liquidation of their affairs,
and the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive days; or
(k) the commencement by the Company or any Restricted Subsidiary of a
voluntary case or proceeding under the Federal Bankruptcy Code or any other
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or any other case or proceeding to be adjudicated bankrupt or
insolvent, or the consent by the Company or any Subsidiary Guarantor or any
other Restricted Subsidiary to the entry of a decree or order for relief in
respect thereof in an involuntary case or proceeding under the Federal
Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by the Company or any
Subsidiary Guarantor or any other Restricted Subsidiary of a petition or consent
seeking reorganization or relief under any applicable federal or state law, or
the consent by it under any such law to the filing of any such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or other similar official) of any of the
Company or any Subsidiary Guarantor or any other Restricted Subsidiary or of any
substantial part of their consolidated assets, or the making by it of an
assignment for the benefit of creditors under any such law, or the admission by
it in writing of its inability to pay its debts generally as they become due or
taking of corporate action by the Company or any such action.
Section 4.2 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in Section
4.1(j) or (k)) with respect to Notes at the time Outstanding shall occur and be
continuing, the Trustee, by written notice to the Company, or the holders of at
least 25% in aggregate principal amount of the Outstanding Notes, by notice to
the Trustee and the Company, may declare all unpaid
38
principal of, premium, if any, and accrued interest on all Notes to be due and
payable immediately, upon which declaration all amounts payable in respect of
such Notes shall be immediately due and payable. If an Event of Default
specified in Section 4.1(j) or (k) occurs and is continuing, then the principal
of, premium, if any, and accrued interest on all Outstanding Notes shall ipso
facto become and be immediately due and payable without any declaration, notice
or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration with respect to Notes has
been made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the Holders of
a majority in aggregate principal amount of the Outstanding Notes, by written
notice to the Company and the Trustee, may rescind such declaration and its
consequences if:
(a) the Company has paid or deposited with the Trustee a sum sufficient to
pay:
(i) 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,
(ii) all overdue interest on all Outstanding Notes,
(iii) all unpaid principal of (and premium, if any, on) any
Outstanding Notes which has become due otherwise than by such declaration
of acceleration and interest on such unpaid principal at the rate borne by
such Notes, and
(iv) to the extent that payment of such interest is lawful, interest
upon overdue interest and overdue principal which has become due otherwise
than by such declaration of acceleration (without duplication of any amount
deposited pursuant to clauses (ii) and (iii) above), at the rate or rates
prescribed therefor in such Notes;
(b) the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction; and
(c) all Events of Default with respect to Notes, other than the nonpayment
of principal of (or premium, if any, on), and interest on Notes that has become
due solely by such declaration of acceleration, have been cured or waived as
provided in Section 4.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Notwithstanding the foregoing, in the event of a declaration of
acceleration in respect of the Notes because of an Event of Default specified in
(A) Section 4.1(e) shall have occurred and be continuing, such declaration of
acceleration and any consequential acceleration shall be automatically rescinded
if the Indebtedness that is the subject of such Event of Default has been
repaid, or if the default relating to such Indebtedness is waived or cured and
if such Indebtedness has been accelerated, then the holders thereof have
rescinded their declaration of acceleration in
39
respect of such Indebtedness (provided, in each case, that such repayment,
waiver, cure or rescission is effected within a period of 10 days from the
continuation of such default beyond the applicable grace period or the
occurrence of such acceleration), or (B) Section 4.1(f) shall have occurred and
be continuing, such declaration and any consequential acceleration shall be
automatically rescinded if the proceedings or enforcement action with respect to
the Indebtedness that is the subject of such Event of Default is terminated or
rescinded, or such Indebtedness has been repaid and only so long as the holder
of such Indebtedness shall not have applied any Property referenced in such
Section 4.1(f) in satisfaction of such Indebtedness; and, in the case of both
(A) and (B) above, written notice of such repayment, or cure or waiver and
rescission, as the case may be, shall have been given to the Trustee by the
Company and countersigned by the holders of such Indebtedness or a trustee,
fiduciary or agent for such holders or other evidence satisfactory to the
Trustee of such events is provided to the Trustee, within 30 days after such
declaration of acceleration in respect of such Securities, and no other Event of
Default has occurred during such 30-day period which has not been cured or
waived during such period, and so long as such rescission of the declaration of
acceleration of the Notes does not conflict with any judgment or decree as
certified to the Trustee by the Company.
Section 4.3 Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if:
(i) default is made in the payment of any installment of interest on
any Note when such interest becomes due and payable and such default
continues for a period of 30 days, or
(ii) default is made in the payment of the principal of (or premium,
if any, on) any Note at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee for the benefit
of the Holders of the Notes, the whole amount then due and payable on the Notes
for principal (and premium, if any) and interest and interest on any overdue
principal (and premium, if any) and, to the extent that payment of such interest
shall be legally enforceable, upon any overdue installment of interest, at the
rate or rates prescribed therefor in the Notes, and, in addition thereto, 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.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Notes and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
Property of the Company or any other obligor upon the Notes, wherever situated.
40
If an Event of Default with respect to the Notes occurs and is continuing,
the Trustee may in its discretion proceed to protect and enforce its rights and
the rights of the Holders of the Notes by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in any
provision of the Notes or this Indenture or in aid of the exercise of any power
granted therein or herein, or to enforce any other proper remedy.
Section 4.4 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Notes
or the Property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company or such other
obligor for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Notes and
to file such other papers or documents and take any other actions including
participation as a full member of any creditor or other committee 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 of
the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other Property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official 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 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 5.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
Section 4.5 Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in
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any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Notes in respect
of which such judgment has been recovered.
Section 4.6 Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in the case of the distribution of such money on account of principal (or
premium, if any) or interest, upon presentation of the Notes and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 5.6;
SECOND: To the payment of the amounts then due and unpaid for principal of
(and premium, if any, on) and interest on the Notes in respect of which or for
the benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on the Notes
for principal (and premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Company.
Section 4.7 Limitation on Suits.
No Holder of a Note shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Notes;
(ii) the Holders of not less than 25% in principal amount of the
Outstanding Notes shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(iv) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
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(v) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of Outstanding Notes;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes, or to obtain or to seek to obtain priority or preference over
any other Holders of Notes or to enforce any right under this Indenture, except
in the manner herein provided and for the equal and ratable benefit of all the
Holders of Notes.
Section 4.8 Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Note shall have the right, which is absolute and unconditional, to receive
payment, as provided herein (including, if applicable, under Article XI) and in
such Note of the principal of (and premium, if any, on) and (subject to Section
2.10) interest on such Note on the respective Stated Maturities expressed in
such Note (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 4.9 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 thereunder,
and all rights and remedies of the Trustee and the Holders shall continue as
though no such proceeding had been instituted.
Section 4.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes in the last paragraph of Section 2.7,
no right or remedy herein conferred upon or reserved to the Trustee or to
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
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Section 4.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 4.12 Control by Holders.
The Holders of not less than a majority in principal amount of the
Outstanding Notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee with respect
to the Notes, or exercising any trust or power conferred on the Trustee,
provided that:
(i) such direction shall not be in conflict with any rule of law or
with this Indenture,
(ii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(iii) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders not joining
therein.
Section 4.13 Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Notes may on behalf of the Holders of all the Notes waive any
existing Default or Event of Default hereunder and its consequences with respect
to the Notes, except a Default or Event of Default:
(i) in the payment of the principal of, premium, if any, or interest
on any Note, or
(ii) in respect of a covenant or provision hereof which under Article
VIII cannot be modified or amended without the consent of the Holder of
each Outstanding Note affected.
Upon any such waiver, such Default or Event of Default shall cease to exist
for every purpose under this Indenture, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
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Section 4.14 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension, or usury law or other
law, which would prohibit or forgive the Company from paying all or any portion
of the principal of (premium, if any, on) and/or interest on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) the Company hereby expressly waives all
benefit or advantage of any such law, and the Company covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 4.15 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 attorney's fees and
expenses, 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 4.15 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 4.8, or a suit by Holders of more than 10% in principal
amount of the then Outstanding Notes.
ARTICLE V
THE TRUSTEE
Section 5.1 Notice of Defaults.
Within 60 days after the occurrence of any Default hereunder with respect
to the Notes, the Trustee shall transmit to Holders of the Notes in the manner
and to the extent provided in TIA Section 313(c), notice of such Default known
to the Trustee, unless such Default shall have been cured or waived; provided,
however, that, except in the case of a Default in the payment of the principal
of (or premium, if any, on) or interest on any Note, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders; and provided, further, that in the
case of any Default of the character specified in Section 4.1(e) with respect to
the Notes, no such notice to Holders shall be given until at least 60 days after
the occurrence thereof.
Section 5.2 Certain Rights of Trustee.
Subject to the provisions of TIA Sections 315(a) through 315(d):
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(a) the Trustee may rely conclusively and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely
conclusively upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection, and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) 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 pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
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(i) the Trustee shall not be deemed to have notice of any Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such a default is received
by the Trustee at the Corporate Trust Office of the Trustee, and such notice
references the Notes and this Indenture;
(j) the rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder; and
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
The Trustee shall not be required to advance, expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Section 5.3 Trustee Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except for the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Notes, except that the Trustee represents that it is duly authorized to
execute and deliver this Indenture, authenticate the Notes and perform its
obligations hereunder, and that the statements made by it in a Statement of
Eligibility on Form T-1 supplied to the Company are true and accurate, subject
to the qualifications set forth herein. The Trustee shall not be accountable for
the use or application by the Company of the Notes or the proceeds thereof.
Section 5.4 May Hold Notes.
The Trustee, any Paying Agent, any Security Registrar or any other agent of
the Company or the Trustee, in its individual or any other capacity, may become
the owner or pledgee of Notes and, subject to TIA Sections 310(b) and 311, may
otherwise deal with the Company with the same rights it would have if it were
not the Trustee, Paying Agent, Security Registrar or such other agent.
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Section 5.5 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
Section 5.6 Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Trustee from time to time such compensation as shall be
agreed in writing from time to time between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel, except any such expense, disbursement
or advance as may be attributable to the Trustee's negligence or bad faith); and
(c) to indemnify the Trustee or any predecessor Trustee for, and to hold it
harmless against, any and all loss, liability, damage, claim or expense,
including taxes (other than taxes based on the income of the Trustee) incurred
without negligence or bad faith on its part, (i) arising out of or in connection
with the acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder or (ii) in
connection with enforcing this indemnification provision.
The obligations of the Company under this Section 5.6 to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture and resignation or removal of the Trustee or any
other termination under any Insolvency or Liquidation Proceeding. As security
for the performance of such obligations of the Company, the Trustee shall have a
claim and lien prior to the Notes upon all property and funds held or collected
by the Trustee as such, except funds held in trust for payment of principal of
(and premium, if any, on) or interest on any Note. Such lien shall survive the
satisfaction and discharge of this Indenture or any other termination under any
Insolvency or Liquidation Proceeding.
When the Trustee incurs expenses or renders services after the occurrence
of an Event of Default specified in paragraph (j) or (k) of Section 4.1 of this
Indenture, such expenses and the compensation for such services are intended to
constitute expenses of administration under any Insolvency or Liquidation
Proceeding.
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Section 5.7 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible to
act as Trustee under TIA Section 310(a)(1) and shall have a combined capital and
surplus of at least $50,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of federal,
state, territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 5.7, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 5.8 Conflicting Interests.
The Trustee shall comply with the provisions of Section 310(b) of the Trust
Indenture Act.
Section 5.9 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 5.10.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 5.10 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition, at
the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of Holders of a majority
in principal amount of the Outstanding Notes, delivered to the Trustee and to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 5.10 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of removal, the Trustee being removed may petition, at
the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Trustee.
(d) If at any time:
(i) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six months,
or
(ii) the Trustee shall cease to be eligible under Section 5.7 and
shall fail to resign after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Note for at least six
months, or
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(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (A) the Company, by a Board Resolution, may remove the
Trustee, or (B) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Notes delivered to the Company
and the retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment, become the successor Trustee and
supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or Holders and accepted
appointment in the manner required by Section 5.10, any Holder who has been a
bona fide Holder of a Note for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee. Such successorship may, but need not be,
evidenced by a supplemental indenture.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to the Holders in the
manner provided for in Section 13.5. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
Section 5.10 Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective, and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of all amounts due it under
Section 5.6, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments to more fully and
certainly vest in and confirm to such successor Trustee all such rights, powers
and trusts.
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No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes; and in case at
that time any of the Notes shall not have been authenticated, any successor
Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificates shall have the full force that is provided anywhere in the Notes or
in this Indenture; provided, however, that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Notes in the name
of any predecessor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
Section 5.12 Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor under the Notes), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company or any such other obligor.
ARTICLE VI
HOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 6.1 Disclosure of Names and Addresses of Holders.
Every Holder of Notes, by receiving and holding the same, agrees with the
Company, the Security Registrar and the Trustee that none of the Company, the
Security Registrar or the Trustee, or any agent of any of them, shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders in accordance with TIA Section 312, regardless of
the source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a request
made under TIA Section 312(b).
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Section 6.2 Reports By Trustee.
Within 60 days after May 15 of each year commencing with May 15, 2002, the
Trustee shall transmit by mail to the Holders, as their names and addresses
appear in the Security Register, a brief report dated as of such May 15 in
accordance with and to the extent required under TIA Section 313(a). The Trustee
shall also comply with TIA Sections 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the Notes
become listed on any stock exchange or automatic quotation system.
A copy of each Trustee's report, at the time of its mailing to Holders,
shall be mailed to the Company and filed with the Commission and each stock
exchange, if any, on which the Notes are listed.
ARTICLE VII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 7.1 Company May Consolidate, etc., Only on Certain Terms.
The Company shall not, in any single transaction or a series of related
transactions, merge or consolidate with or into any other Person, or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
its Properties to any Person or group of Affiliated Persons, unless at the time
and after giving affect thereto:
(a) either (i) if the transaction or transactions is a merger, the Company
shall be the surviving Person of such merger, or (ii) the Person formed by such
consolidation or into which the Company is merged or to which the Properties of
the Company are sold, assigned, conveyed, transferred, leased or otherwise
disposed of (any such surviving Person or transferee Person being the "Surviving
Entity") shall be organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia and shall, in either
case, expressly assume by a supplemental indenture to this Indenture executed
and delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company for the due and punctual payment of the principal of
(and premium, if any, on) and interest on all the Notes and the performance and
observance of every covenant of this Indenture on the part of the Company to be
performed or observed, and this Indenture shall remain in full force and effect;
(b) 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 in
connection with or as a result of such transaction or transactions as having
been incurred at the time of such transaction or transactions), no Default or
Event of Default shall have occurred and be continuing;
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(c) if any of the Properties of the Company or any of its Restricted
Subsidiaries would upon such transaction or series of related transactions
become subject to any Lien (other than a Permitted Lien), the creation or
imposition of such Lien shall have been in compliance with Section 9.10;
(d) except in the case of the consolidation or merger of any Restricted
Subsidiary with or into the Company, immediately after giving effect to such
transaction or transactions on a pro forma basis (on the assumption that the
transaction or transactions occurred on the first day of the period of four full
fiscal quarters ending immediately prior to the consummation of such transaction
or transactions with the appropriate adjustments with respect to the transaction
or transactions being included in such pro forma calculation) the Company (or
the Surviving Entity if the Company is not the continuing obligor under this
Indenture) could incur $1.00 of additional Indebtedness (excluding Permitted
Indebtedness) under Section 9.14 hereof;
(e) if the Company is not the continuing obligor under this Indenture, then
each Subsidiary Guarantor, unless it is the party to the transactions described
above, shall have by supplemental indenture confirmed that its Subsidiary
Guarantee shall apply to such Person's obligations under this Indenture and the
Notes; and
(f) the Company or the Surviving Person shall have delivered to the Trustee
(i) an Officers' Certificate in form and substance reasonably acceptable to the
Trustee, stating that such consolidation, merger, conveyance, transfer, lease or
other disposition and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, complies with this Indenture
and that all conditions precedent herein relating to such transaction or
transactions have been satisfied and (ii) an Opinion of Counsel stating that the
requirements of Section 7.1(a) have been complied with.
Section 7.2 Successor Substituted.
Upon any consolidation of the Company with or merger of the Company with or
into any other entity or any sale, assignment, lease, conveyance, transfer or
other disposition of all or substantially all of the Properties of the Company
to any Person in accordance with Section 7.1, the successor Person formed by
such consolidation or into which the Company is merged or to which such sale,
assignment, conveyance, transfer or other disposition is made shall succeed to,
and be substituted for, 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, and in the event of any such sale, assignment,
conveyance, transfer or other disposition, the Company (which term shall for
this purpose mean the Person named as the "Company" in the first paragraph of
this Indenture or any successor Person which shall theretofore become such in
the manner described in Section 7.1), except in the case of a lease, shall be
discharged of all obligations and covenants under this Indenture and the
Securities and the Company may be dissolved and liquidated.
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ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, any Subsidiary Guarantors, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(a) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company contained
herein and in the Notes; or
(b) to add to the covenants of the Company for the benefit of Holders or to
surrender any right or power herein conferred upon the Company; or
(c) to add any additional Events of Default; or
(d) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee pursuant to the requirements of Sections 5.9 and 5.10; or
(e) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or to
qualify, or maintain the qualification of, the Indenture under the TIA or to
make any other provisions with respect to matters or questions arising under
this Indenture; provided that such action shall not adversely affect the
interests of the Holders in any material respect; or
(f) to secure the Notes pursuant to the requirements of Section 9.10 or
otherwise; or
(g) to provide for uncertificated Notes in addition to or in place of
certificated Notes; or
(h) to evidence and provide for the acceptance of appointment hereunder by
a separate trustee with respect to the Notes and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the appointment of more than one Trustee; or
(i) to add any Person as a Subsidiary Guarantor as provided in Section
9.12(a) hereof or to evidence the succession of another Person to any Subsidiary
Guarantor and the assumption by any such successor of the covenants and
agreements of such Subsidiary Guarantor contained herein, in the Notes and in
the Subsidiary Guarantee; or
54
(j) to release a Subsidiary Guarantor from its Subsidiary Guarantee
pursuant to Section 9.12(c), 11.2 or 11.3 hereof.
Section 8.2 Supplemental Indentures with Consent of Holders.
With the consent of the Holders of a majority in principal amount of the
Outstanding Notes affected by such supplemental indenture, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution, any Subsidiary Guarantors, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Notes under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note affected thereby:
(a) change the Stated Maturity of the principal of, or any installment of
interest on, any Note, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof, or change
the coin or currency in which any Note or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any such
payment after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date); or
(b) reduce the percentage of aggregate principal amount of the Outstanding
Notes, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture; or
(c) modify any of the provisions of this Section or Sections 4.13 and 9.11,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Note affected thereby; or
(d) modify Section 9.12 hereof or any provisions of this Indenture relating
to any Subsidiary Guarantees in a manner adverse to the Holders thereof; or
(e) amend, change or modify the obligation of the Company to make and
consummate a Change of Control Offer in the event of a Change of Control, or to
make and consummate a Net Proceeds Offer with respect to any Asset Sale or
modify any of the provisions or definitions with respect thereto
It shall not be necessary for any Act of the Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
55
Section 8.3 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 8.4 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
Section 8.5 Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 8.6 Reference in Notes to Supplemental Indentures.
Any Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.
Section 8.7 Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 8.2, the Company
shall give notice thereof to the Holders of each Outstanding Note affected, in
the manner provided for in Section 13.5, setting forth in general terms the
substance of such supplemental indenture.
56
ARTICLE IX
COVENANTS
Section 9.1 Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the Holders of Notes
that it will duly and punctually pay the principal of (and premium, if any, on)
and interest on the Notes in accordance with the terms of the Notes and this
Indenture. The Company shall pay interest (including post-petition interest in
any proceeding under the Federal Bankruptcy Code or any similar state bankruptcy
law) on overdue principal, and premium, if any, at the rate prescribed therefor
in such Notes to the extent lawful; and it shall pay interest (including
post-petition interest in any proceeding under the Federal Bankruptcy Code or
any similar state bankruptcy law) on overdue installments of interest (without
regard to any applicable grace period) at the prescribed rate to the extent
lawful.
Section 9.2 Maintenance of Office or Agency.
The Company shall maintain in the City of New York an office or agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Corporate Trust Office shall be such office or agency of the
Company, unless the Company shall designate and maintain some other office or
agency for one or more of such purposes. The Company will give prompt written
notice to the Trustee of any change in the location of any such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
aforementioned office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside of the City of New York) where the Notes may be
presented or surrendered for any or all such purposes and may from time to time
rescind any such designation; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in the City of New York in accordance with the requirements
provided herein for such purposes. The Company will give prompt written notice
to the Trustee of any such designation or rescission and any change in the
location of any such other office or agency.
Section 9.3 Money for Note Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to the Notes, it shall, on or before each due date of the principal of (and
premium, if any, on) or interest on any of the Notes, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum
57
sufficient to pay the principal (and premium, if any) or interest so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure so
to act.
Whenever the Company shall have one or more Paying Agents for the Notes, it
will, on or before 11:00 A.M., New York City time, on each due date of the
principal of (and premium, if any, on), or interest on, any Notes, deposit with
a Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company shall promptly notify the Trustee of such
action or any failure so to act.
The Company shall cause each Paying Agent for the Notes (other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of (and
premium, if any, on) or interest on the Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any other
obligor upon the Notes) in the making of any payment of principal (and premium,
if any) or interest; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
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 (and premium, if any,
on) or interest on any Note and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company on Company Request unless an abandoned property law
designates another Person, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Note shall thereafter, as an unsecured
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 a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the city of each
place of payment of principal of,
58
(and premium, if any on) and interest on the Notes 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 publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
Section 9.4 Corporate Existence.
Except as expressly permitted by Article VII or other provisions of this
Indenture, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect the corporate existence, rights
(charter and statutory) and franchises of the Company and each Restricted
Subsidiary; provided, however, that the Company shall not be required to
preserve any such existence of its Restricted Subsidiaries, right or franchise,
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Restricted Subsidiaries, taken as a whole, and that the loss thereof is not
disadvantageous in any material respect to Holders.
Section 9.5 Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or Property of the Company or any
Restricted Subsidiary and (b) all lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a Lien upon the Property of the
Company or any Restricted Subsidiary; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which
appropriate provision has been made in accordance with GAAP.
Section 9.6 Maintenance of Properties.
The Company shall cause all material Properties owned by the Company or any
Restricted Subsidiary and used or held for use in the conduct of its business or
the business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order (ordinary wear and tear excepted), all as in
the judgment of the Company may be necessary so that its business may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
maintenance of any of such Properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business or the business of any
Restricted Subsidiary and not disadvantageous in any material respect to the
Holders. Notwithstanding the foregoing, nothing contained in this Section 9.6
shall limit or impair in any way the right of the Company and its Restricted
Subsidiaries to sell, divest and otherwise to engage in transactions that are
otherwise permitted by this Indenture.
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Section 9.7 Insurance.
The Company shall at all times keep all of its and its Restricted
Subsidiaries' Properties which are of an insurable nature insured (including
appropriate self-insurance) with insurers, believed by the Company to be
responsible, against loss or damage to the extent that, in the reasonable good
faith opinion of the Company, property of similar character is usually so
insured by corporations similarly situated and owning like properties.
The Company may adopt such other plan or method of protection, in lieu of
or supplemental to insurance with insurers, whether by the establishment of an
insurance fund or reserve to be held and applied to make good losses from
casualties, or otherwise, conforming to the systems of self-insurance, in the
reasonable good faith opinion of the Company, maintained by corporations
similarly situated and owning like properties, as may be determined by the Board
of Directors.
Section 9.8 Statement by Officers as to Default.
(a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company and within 45 days of the end of each of the
first, second and third quarters of each fiscal year of the Company, an
Officers' Certificate, one of the signers of which shall be the principal
executive officer, principal financial officer or principal accounting officer
of the Company, stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal quarter or fiscal year, as applicable,
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 such Officer's 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 hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which such Officer may have knowledge and what action the
Company is taking or proposes to take with respect thereto). Such Officers'
Certificate shall comply with TIA Section 314(a)(4). For purposes of this
Section 9.8(a), such compliance shall be determined without regard to any period
of grace or requirement of notice under this Indenture.
(b) The Company shall, so long as any Notes are Outstanding, deliver to the
Trustee forthwith upon any Officer becoming aware of any Default or Event of
Default or default in the performance of any covenant, agreement or condition
contained in this Indenture, an Officers' Certificate specifying such Default or
Event of Default and what action the Company proposes to take with respect
thereto within 10 days of its occurrence.
Section 9.9 Reports.
The Company shall file on a timely basis with the Commission, to the extent
such filings are accepted by the Commission and whether or not the Company has a
class of securities
60
registered under the Exchange Act, the annual reports, quarterly reports and
other documents that the Company would be required to file if it were subject to
Section 13 or 15(d) of the Exchange Act). The Company will also be required to
file with the Trustee copies of such reports and documents within 15 days after
the date on which the Company files such reports and documents with the
Commission or the date on which the Company would be required to file such
reports and documents if the Company were so required. The Company also will
furnish at its cost copies of such reports and documents to any Holder of Notes
promptly upon written request, irrespective of whether or not the Company files
any such report or document with the Commission. The Company and each Subsidiary
Guarantor also shall comply with other provisions of TIA Section 314(a).
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 9.10 Limitation on Liens.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume, affirm or suffer to exist or
become effective any Lien of any kind, except for Permitted Liens, on or with
respect to any of its property or assets (including any intercompany notes),
whether owned at the date of this Indenture or thereafter acquired, or any
income, profits or proceeds therefrom, unless (a) in the case of any Lien
securing Subordinated Indebtedness, the Securities (then Outstanding and
thereafter created) are secured by a Lien on such property, assets or proceeds
that is senior in priority to such Lien and (b) in the case of any other Lien,
the Securities (then Outstanding and thereafter created) are directly secured
equally and ratably with the obligation or liability secured by such Lien.
Section 9.11 Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 9.5 through 9.10, Sections 9.13 and
9.14 and Sections 9.17 through 9.20 hereof if, before or after the time for such
compliance, the Holders of at least a majority in principal amount of the
Outstanding Notes and the Subsidiary Guarantors, by Act of such Holders and
written agreement of the Subsidiary Guarantors, waive such compliance in such
instance with such term, provision or condition, but no such waiver shall extend
to or affect such term, provision or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
Section 9.12 Limitation on Non-Guarantor Restricted Subsidiaries
(a) The Company shall not permit any Restricted Subsidiary that is not a
Subsidiary Guarantor to guarantee the payment of any Indebtedness of the Company
unless (i) such
61
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture, in substantially the form of Exhibit B hereto,
providing for a Subsidiary Guarantee of the Notes by such Restricted Subsidiary;
(ii) such Restricted Subsidiary waives, and agrees not in any manner whatsoever
to claim or take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against the Company or any other
Restricted Subsidiary as a result of any payment by such Restricted Subsidiary
under its Subsidiary Guarantee until such time as the obligations guaranteed
thereby are paid in full; and (iii) such Restricted Subsidiary shall deliver to
the Trustee an Opinion of Counsel to the effect that such supplemental indenture
has been duly executed and authorized and such Subsidiary Guarantee constitutes
a valid, binding and enforceable obligation of such Restricted Subsidiary,
except insofar as enforcement thereof may be limited by bankruptcy, insolvency
or similar laws (including, without limitation, all laws relating to fraudulent
transfers) and except insofar as enforcement thereof is subject to general
principles of equity; provided that this paragraph (a) shall not be applicable
to (x) any guarantee of any Restricted Subsidiary that (1) existed at the time
such Person became a Restricted Subsidiary of the Company and (2) was not
incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary of the Company or (y) any guarantee of any Restricted
Subsidiary of Indebtedness of the Company described in clause (a) of the
definition of Permitted Indebtedness.
(b) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, transfer any assets, businesses, divisions, real property or
equipment to any Restricted Subsidiary (other than sales of oil and natural gas
production in the ordinary course of business at prices under contracts in
existence as of the date of this Indenture or on terms not less favorable to the
Subsidiary than would be obtainable at the time in comparable transactions
through arms-length dealings with Persons other than Affiliates of the Company
or any transfer that results in Permitted Subsidiary Indebtedness) or acquire
Capital Stock of a new Restricted Subsidiary that in either case is not a
Subsidiary Guarantor unless (i) such transferee or new Restricted Subsidiary
enters into a Subsidiary Guarantee by complying with Section 9.12(a) hereof or
(ii) the aggregate Fair Market Value at the time of such proposed transfer or
acquisition, of such assets, businesses, divisions, real property or equipment
proposed to be transferred or Capital Stock of a new Restricted Subsidiary
proposed to be acquired, together with the aggregate Fair Market Value of all
assets, businesses, divisions, real property or equipment previously transferred
pursuant to this clause (ii) and Capital Stock previously acquired pursuant to
this clause (ii) (in each case valued at the time of transfer or acquisition)
does not exceed (x) the greater of $50,000,000 and 5% of Adjusted Consolidated
Net Tangible Assets less (y) the book value of total combined assets of all
Subsidiaries of the Company at December 31, 2001, as reflected in a
consolidating balance sheet of the Company prepared in accordance with GAAP
(exclusive, in the case of each of clauses (x) and (y), of intercompany
receivables and liabilities due from the Company and assets subject to any
Sale/Leaseback Transaction treated as an operating lease in the consolidated
financial statements of the Company); provided that, in the case of clause (ii),
if the Restricted Subsidiary to which such transfer was made or whose Capital
Stock was acquired subsequently enters into a Subsidiary Guarantee, such
transfer or acquisition shall be treated as having been made pursuant to clause
(i).
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(c) Notwithstanding the foregoing and the other provisions of this
Indenture, any Subsidiary Guarantee incurred by a Restricted Subsidiary pursuant
to this Section 9.12 shall provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person that is not an Affiliate of the Company, of all of the
Company's Capital Stock in such Restricted Subsidiary (which sale, exchange or
transfer is not prohibited by this Indenture), (ii) the merger of such
Restricted Subsidiary into the Company or any other Restricted Subsidiary or the
liquidation and dissolution of such Restricted Subsidiary (in each case to the
extent not prohibited by this Indenture), or (iii) (x) the release or discharge
of all guarantees by such Restricted Subsidiary of any Indebtedness other than
Note Obligations, except a discharge or release by or as a result of payment
under such guarantees and (y) after giving effect to the proposed release and
discharge, the aggregate total combined assets of all Restricted Subsidiaries
that are not Subsidiary Guarantors (exclusive of intercompany receivables and
liabilities due from the Company and assets subject to any Sale/Leaseback
Transaction treated as an operating lease in the consolidated financial
statements of the Company) do not exceed the greater of $50,000,000 and 5% of
Adjusted Consolidated Net Tangible Assets.
Section 9.13 Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, take the following actions:
(i) declare or pay any dividend on, or make any distribution to
holders of, any shares of the Company's Capital Stock (other than dividends
or distributions payable solely in shares of Qualified Capital Stock of the
Company, options, warrants or other rights to purchase Qualified Capital
Stock of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any Affiliate thereof (other than any
Restricted Subsidiary of the Company) or any options, warrants or other
rights to acquire such Capital Stock; provided, however, that the Company
may purchase, redeem or otherwise retire common stock of the Company in an
amount not to exceed $10,000,000 in the aggregate for all such transactions
after the Issue Date, and; provided, further, that the Company may make any
payment of the applicable redemption price in connection with a Qualified
Redemption Transaction;
(iii) make any principal payment on or repurchase, redeem, defease or
otherwise acquire or retire for value, prior to any scheduled principal
payment, scheduled sinking fund payment or maturity, any Subordinated
Indebtedness, provided, however, that the Company may make any payment of
the applicable redemption price in connection with a Qualified Redemption
Transaction;
(iv) declare or pay any dividend on, or make any distribution to the
holders of, any shares of Capital Stock of any Restricted Subsidiary of the
Company (other than to the Company or any of its Restricted Subsidiaries)
or purchase, redeem or otherwise
63
acquire or retire for value any Capital Stock of any Restricted Subsidiary
or any options, warrants or other rights to acquire any such Capital Stock
(other than with respect to any such Capital Stock held by the Company or
any Wholly Owned Restricted Subsidiary of the Company);
(v) make any Investment (other than a Permitted Investment); or
(vi) incur any guarantee of Indebtedness of any Affiliate (other than
(A) guarantees of Indebtedness of any Restricted Subsidiary by the Company
or (B) guarantees of Indebtedness of the Company by any Restricted
Subsidiary, in each case in accordance with the terms of this Indenture);
(such payments or other actions described in (but not excluded from)
clauses (i) through (vi) are collectively referred to as "Restricted
Payments"), unless at the time of and after giving effect to the proposed
Restricted Payment (with the amount of any such Restricted Payment, if
other than cash, being the amount determined by the Board of Directors of
the Company, whose determination shall be conclusive and evidenced by a
Board Resolution), (1) no Default or Event of Default shall have occurred
and be continuing, (2) the Company could incur $1.00 of additional
Indebtedness (excluding Permitted Indebtedness) in accordance with Section
9.14 hereof and (3) the aggregate amount of all Restricted Payments
declared or made after April 1, 1997, shall not exceed the sum (without
duplication) of the following:
(I) 50% of the aggregate cumulative Consolidated Net Income of
the Company accrued on a cumulative basis during the period beginning
on May 1, 1997, and ending on the last day of the Company's last
fiscal quarter ending prior to the date of such proposed Restricted
Payment (or, if such aggregate cumulative Consolidated Net Income
shall be a loss, minus 100% of such loss), plus
(II) the aggregate net cash proceeds received after April 1,
1997, by the Company as capital contributions to the Company (other
than from any Restricted Subsidiary), plus
(III) the aggregate net cash proceeds, and the Fair Market Value
at the date of acquisition of Property other than cash or Cash
Equivalents, received after April 1, 1997 by the Company from or as
the result of the issuance or sale (other than to any of its
Restricted Subsidiaries) of shares of Qualified Capital Stock of the
Company or any options, warrants or rights to purchase such shares of
Qualified Capital Stock of the Company, plus
(IV) the aggregate net cash proceeds received after April 1, 1997
by the Company (other than from any of its Restricted Subsidiaries)
upon the exercise of any options, warrants or rights to purchase
shares of Qualified Capital Stock of the Company, plus
64
(V) the aggregate net cash proceeds, and the Fair Market Value at
the date of acquisition of Property other than cash or Cash
Equivalents, received after April 1, 1997 by the Company from or as
the result of the issuance or sale (other than to any of its
Restricted Subsidiaries) of debt securities or shares of Redeemable
Capital Stock that have been converted into or exchanged for Qualified
Capital Stock of the Company, together with the aggregate cash and the
Fair Market Value at the date of acquisition of Property other than
cash or Cash Equivalents received by the Company at the time of such
conversion or exchange, plus
(VI) To the extent not otherwise included in the Company's
Consolidated Net Income, the net reduction in Investments in
Unrestricted Subsidiaries resulting from the payments of interest on
Indebtedness, dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Company or a Restricted
Subsidiary after April 1, 1997 from any Unrestricted Subsidiary or
from the redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary (valued in each case as provided in the definition of
"Investment"), not to exceed in the case of any Unrestricted
Subsidiary the total amount of Investments (other than Permitted
Investments) in such Unrestricted Subsidiary made by the Company and
its Restricted Subsidiaries in such Unrestricted Subsidiary after
April 1, 1997, plus
(VII) $50,000,000.
(b) Notwithstanding paragraph (a) above, the Company and its Restricted
Subsidiaries may take the following actions so long as (in the case of clauses
(ii), (iii), (iv) and (vi) below) no Default or Event of Default shall have
occurred and be continuing:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such declaration complied
with the provisions of paragraph (a) above (and such payment shall be
deemed to have been paid on such date of declaration for purposes of any
calculation required by the provisions of paragraph (a) above);
(ii) the repurchase, redemption or other acquisition or retirement of
any shares of any class of Capital Stock of the Company or any Restricted
Subsidiary, in exchange for, or out of the aggregate net cash proceeds of,
a substantially concurrent issue and sale (other than to a Restricted
Subsidiary) of shares of Qualified Capital Stock of the Company;
(iii) the purchase, redemption, repayment, defeasance or other
acquisition or retirement for value of any Subordinated Indebtedness (other
than Redeemable Capital Stock) in exchange for or out of the aggregate net
cash proceeds of a substantially concurrent issue and sale (other than to a
Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
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(iv) (A) the purchase, redemption, repayment, defeasance or other
acquisition or retirement for value of any Existing Subordinated Notes or
(B) the purchase, redemption, repayment, defeasance or other acquisition or
retirement for value of any other Subordinated Indebtedness (other than
Redeemable Capital Stock) in exchange for, or out of the aggregate net cash
proceeds of, a substantially concurrent incurrence (other than to a
Restricted Subsidiary) of Subordinated Indebtedness of the Company so long
as (x) the principal amount of such new Indebtedness does not exceed the
principal amount (or, if such Subordinated Indebtedness being refinanced
pursuant to this subclause (B) provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of determination)
of the Subordinated Indebtedness being so purchased, redeemed, repaid,
defeased, acquired or retired pursuant to this subclause (B), plus the
amount of any premium required to be paid in connection with such
refinancing pursuant to the terms of the Subordinated Indebtedness
refinanced pursuant to this subclause (B) or the amount of any premium
reasonably determined by the Company as necessary to accomplish such
refinancing, plus the amount of expenses of the Company incurred in
connection with such refinancing, (y) such new Subordinated Indebtedness is
subordinated to the Notes at least to the same extent as such Subordinated
Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired
pursuant to this subclause (B), and (z) such new Subordinated Indebtedness
has an Average Life to Stated Maturity that is longer than the Average Life
to Stated Maturity of the Notes and such new Subordinated Indebtedness has
a Stated Maturity for its final scheduled principal payment that is at
least 91 days later than the Stated Maturity for the final scheduled
principal payment of the Notes;
(v) repurchases, acquisitions or retirements of shares of Qualified
Capital Stock of the Company deemed to occur upon the exercise of stock
options or similar rights issued under employee benefit plans of the
Company if such shares represent all or a portion of exercise price or are
surrendered in connection with satisfying any federal income tax
obligation; or
(vi) repurchases, redemptions, other acquisitions or retirements for
value of Capital Stock of the Company held by employees of the Company or
any Restricted Subsidiary in an amount not to exceed $2,000,000 in the
aggregate during any calendar year.
The actions described in clauses (i), (ii), (iii) and (vi) of this
paragraph (b) shall be Restricted Payments that shall be permitted to be
taken in accordance with this paragraph (b) but shall reduce the amount
that would otherwise be available for Restricted Payments under clause (3)
of paragraph (a) (provided that any dividend paid pursuant to clause (i) of
this paragraph (b) shall reduce the amount that would otherwise be
available under clause (3) of paragraph (a) when declared, but not also
when subsequently paid pursuant to such clause (i)), and the actions
described in clauses (iv) and (v) of this paragraph (b) shall be Restricted
Payments that shall be permitted to be taken in
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accordance with this paragraph and shall not reduce the amount that would
otherwise be available for Restricted Payments under clause (3) of
paragraph (a).
(c) In computing Consolidated Net Income of the Company under paragraph (a)
above, (i) 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 (ii) 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 in 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 9.14 Limitation on Indebtedness
The Company shall not, and shall not permit any Restricted Subsidiary to,
create, incur, issue, assume, guarantee or in any manner become directly or
indirectly liable for the payment of (collectively "incur") any Indebtedness
(including any Acquired Indebtedness), other than Permitted Indebtedness and
Permitted Subsidiary Indebtedness, as the case may be; provided, however, that
the Company and its Restricted Subsidiaries that are Subsidiary Guarantors may
incur additional Indebtedness if (i) the Company's Consolidated Fixed Charge
Coverage Ratio for the four full fiscal quarters immediately preceding the
incurrence of such Indebtedness (and for which financial statements are
available), taken as one period (at the time of such incurrence, after giving
pro forma effect to: (x) the incurrence of such Indebtedness and (if applicable)
the application of the net proceeds therefrom, including to refinance other
Indebtedness or to acquire producing oil and natural gas Properties, as if such
Indebtedness had been incurred and the application of such proceeds had occurred
at the beginning of such four-quarter period; (y) the incurrence, repayment or
retirement of any other Indebtedness (including Permitted Indebtedness) by the
Company or its Restricted Subsidiaries since the first day of such four-quarter
period (including any other Indebtedness to be incurred concurrently with the
incurrence of such Indebtedness) as if such Indebtedness had been incurred,
repaid or retired at the beginning of such four-quarter period; and (z) the
acquisition (whether by purchase, merger or otherwise) or disposition (whether
by sale, merger or otherwise) of any Person acquired or disposed of by the
Company or its Restricted Subsidiaries, as the case may be, since the first day
of such four-quarter period, as if such acquisition or disposition had occurred
at the beginning of such four-quarter period), would have been equal to at least
2.50 to 1.0 and (ii) no Default or Event of Default shall have occurred and be
continuing at the time such additional Indebtedness is incurred or would occur
as a consequence of the incurrence of the additional Indebtedness.
For purposes of determining compliance with this Section 9.14, in the event
that an item of Indebtedness (including Acquired Indebtedness) meets the
criteria of more than one of the categories of Permitted Indebtedness or
Permitted Subsidiary Indebtedness, as applicable, or is
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entitled to be incurred pursuant to clauses (i) and (ii) of the proviso to the
first sentence of the preceding paragraph of this Section 9.14, the Company may,
in its sole discretion, classify (or later reclassify) in whole or in part such
item of Indebtedness in any manner that complies with this Section 9.14 and such
item of Indebtedness or a portion thereof may be classified (or later
reclassified) in whole or in part as having been incurred under more than one of
the applicable clauses of Permitted Indebtedness or Permitted Subsidiary
Indebtedness or pursuant to clauses (i) and (ii) of the proviso to the first
sentence of the preceding paragraph hereof. Accrual of interest, the accretion
of accreted value and the payment of interest in the form of additional
Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes
of this covenant.
Section 9.15 Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase (a "Change of Control Offer") all of the
then Outstanding Notes, in whole or in part, from the Holders of such Notes in
integral multiples of $1,000, at a purchase price (the "Change of Control
Purchase Price") equal to 101% of the aggregate principal amount of such Notes,
plus accrued and unpaid interest to the Change of Control Purchase Date (as
defined below), in accordance with the procedures set forth in paragraphs (b),
(c) and (d) of this Section. The Company shall, subject to the provisions
described below, be required to purchase all Notes properly tendered into the
Change of Control Offer and not withdrawn. The Company will not be required to
make a Change of Control Offer upon a Change of Control if a third party makes
the Change of Control Offer at the same purchase price, at the same times and
otherwise in substantial compliance with the requirements applicable to a Change
of Control Offer made by the Company and purchases all Notes validly tendered
and not withdrawn under such Change of Control Offer.
(b) The Change of Control Offer is required to remain open for at least 20
Business Days and until the close of business on the fifth Business Day prior to
the Change of Control Purchase Date.
(c) Not later than the 30th day following any Change of Control, the
Company shall give to the Trustee in the manner provided in Section 13.4 and
each Holder of the Notes in the manner provided in Section 13.5, a notice (the
"Change of Control Notice") stating:
(1) that a Change in Control has occurred and that such Holder has the
right to require the Company to repurchase such Holder's Notes, or portion
thereof, at the Change of Control Purchase Price;
(2) any information regarding such Change of Control required to be
furnished pursuant to Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder;
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(3) a purchase date (the "Change of Control Purchase Date") which
shall be on a Business Day and no earlier than 30 days nor later than 70
days from the date the Change of Control occurred;
(4) that any Note, or portion thereof, not tendered or accepted for
payment will continue to accrue interest;
(5) that unless the Company defaults in depositing money with the
Paying Agent in accordance with the last paragraph of paragraph (d) of this
Section 9.15, or payment is otherwise prevented, any Note, or portion
thereof, accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Purchase Date; and
(6) the instructions a Holder must follow in order to have its Notes
repurchased in accordance with paragraph (d) of this Section.
(d) Holders electing to have Notes purchased will be required to surrender
such Notes to the Company at the address specified in the Change of Control
Notice at least five Business Days prior to the Change of Control Purchase Date.
Holders will be entitled to withdraw their election if the Company receives, not
later than three Business Days prior to the Change of Control Purchase Date, a
facsimile transmission or letter setting forth the name of the Holder, the
certificate number(s) and principal amount of the Notes delivered for purchase
by the Holder as to which his election is to be withdrawn and a statement that
such Holder is withdrawing his election to have such Notes purchased. Holders
whose Notes are purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered.
On the Change of Control Purchase Date, the Company shall (i) accept for
payment all Notes or portions thereof tendered pursuant to a Change of Control
Offer; (ii) deposit with the Paying Agent money sufficient to pay the purchase
price of all Notes or portions thereof so tendered; and (iii) deliver or cause
to be delivered to the Trustee the Notes so accepted. The Paying Agent shall
promptly mail or deliver to Holders of the Notes so accepted payment in an
amount equal to the purchase price, and the Company shall execute and the
Trustee will promptly authenticate and mail or make available for delivery to
such Holders a new Note equal in principal amount to any unpurchased portion of
the Note which any Holder did not surrender for purchase. Any Notes not so
accepted will be promptly mailed or delivered to the Holder thereof. The Company
shall announce the results of a Change of Control Offer on or as soon as
practicable after the Change of Control Purchase Date. For purposes of this
Section 9.15, the Trustee will act as the Paying Agent.
Section 9.16 Limitation on Disposition of Proceeds of Asset Sales.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any Asset Sale unless (i) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the Fair Market Value of the Properties sold or otherwise
disposed of pursuant to the Asset Sale and (ii) the Fair Market
69
Value of all forms of consideration other than cash, Cash Equivalents and Liquid
Securities received with respect to any Asset Sale, when taken together with the
Fair Market Value of all consideration other than cash, Cash Equivalents and
Liquid Securities received by the Company and its Restricted Subsidiaries with
respect to all other Asset Sales since the Issue Date, shall not exceed an
aggregate amount equal to 10% of Adjusted Consolidated Net Tangible Assets at
the date of each determination.
(b) If the Company or any Restricted Subsidiary engages in an Asset Sale,
the Company may either (i) apply the Net Cash Proceeds thereof to permanently
reduce Pari Passu Indebtedness, or (ii) invest all or any part of the Net Cash
Proceeds thereof, within 365 days after such Asset Sale, in Oil and Gas
Properties, (iii) apply the Net Cash Proceeds thereof to acquire a controlling
interest in a Person that is primarily engaged in the Oil and Gas Business or
(iv) apply the Net Cash Proceeds thereof to develop or exploit the Company's Oil
and Gas Properties. The amount of such Net Cash Proceeds not applied or invested
as provided in this paragraph constitutes "Excess Proceeds," subject to
disposition as provided below.
(c) When the aggregate amount of Excess Proceeds equals or exceeds
$15,000,000 (the "Trigger Date"), the Company shall make an offer to purchase,
from all Holders of the Notes then Outstanding and any then outstanding Pari
Passu Indebtedness required to be repurchased or repaid on a permanent basis in
connection with an Asset Sale, an aggregate principal amount of Notes and any
then outstanding Pari Passu Indebtedness equal to such Excess Proceeds as
follows:
(i) (A) No later than the 30th day following the Trigger Date, the
Company shall give to the Trustee in the manner provided in Section 13.4
hereof and each Holder of the Notes in the manner provided in Section 13.5
hereof, notice (a "Purchase Notice") offering to purchase (a "Net Proceeds
Offer") from all Holders of the Notes the maximum principal amount
(expressed as a multiple of $1,000) of Notes that may be purchased out of
an amount (the "Payment Amount") equal to the product of such Excess
Proceeds multiplied by a fraction, the numerator of which is the
outstanding principal amount of the Notes and the denominator of which is
the sum of the outstanding principal amount of the Notes and such Pari
Passu Indebtedness, if any (subject to proration in the event such amount
is less than the aggregate Offered Price of all Notes tendered), and (B) to
the extent required by such Pari Passu Indebtedness and provided there is a
permanent reduction in the principal amount of such Pari Passu
Indebtedness, the Company shall make an offer to purchase Pari Passu
Indebtedness (a "Pari Passu Offer") in an amount (the "Pari Passu
Indebtedness Amount") equal to the excess of the Excess Proceeds over the
Payment Amount.
(ii) The offer price for the Notes shall be payable in cash in an
amount equal to 100% of the principal amount of the Notes tendered pursuant
to a Net Proceeds Offer, plus accrued and unpaid interest to the date such
Net Proceeds Offer is consummated (the "Offered Price"), in accordance with
paragraph (d) of this Section. To the extent that the aggregate Offered
Price of the Notes tendered pursuant to a Net Proceeds Offer is less than
the Payment Amount relating thereto or the aggregate amount of the Pari
Passu
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Indebtedness that is purchased or repaid pursuant to the Pari Passu Offer
is less than the Pari Passu Indebtedness Amount (such shortfall
constituting a "Net Proceeds Deficiency"), the Company may use such Net
Proceeds Deficiency, or a portion thereof, for general corporate purposes,
subject to the limitations of Section 9.13 hereof.
(iii) If the aggregate Offered Price of Notes validly tendered and not
withdrawn by Holders thereof exceeds the Payment Amount, Notes to be
purchased will be selected on a pro rata basis. Upon completion of such Net
Proceeds Offer and Pari Passu Offer, the amount of Excess Proceeds shall be
reset to zero.
(iv) The Purchase Notice shall set forth a purchase date (the "Net
Proceeds Payment Date"), which shall be on a Business Day no earlier than
30 days nor later than 70 days from the Trigger Date. The Purchase Notice
shall also state (A) that a Trigger Date with respect to one or more Asset
Sales has occurred and that such Holder has the right to require the
Company to repurchase such Holder's Securities at the Offered Price,
subject to the limitations described in the forgoing paragraph (iii), (B)
any information regarding such Net Proceeds Offer required to be furnished
pursuant to Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder, (C) that any Note, or portion thereof, not
tendered or accepted for payment will continue to accrue interest, (D)
that, unless the Company defaults in depositing money with the Paying Agent
in accordance with the last paragraph of paragraph (d) of this Section
9.16, or payment is otherwise prevented, any Note, or portion thereof,
accepted for payment pursuant to the Net Proceeds Offer shall cease to
accrue interest after the Net Proceeds Payment Date, and (E) the
instructions a Holder must follow in order to have its Securities
repurchased in accordance with paragraph (d) of this Section.
(d) Holders electing to have Notes purchased will be required to surrender
such Notes to the Company at the address specified in the Purchase Notice at
least five Business Days prior to the Net Proceeds Payment Date. Holders will be
entitled to withdraw their election if the Company receives, not later than
three Business Days prior to the Net Proceeds Payment Date, a facsimile
transmission or letter setting forth the name of the Holder, the certificate
number(s) and principal amount of the Notes delivered for purchase by the Holder
as to which his election is to be withdrawn and a statement that such Holder is
withdrawing his election to have such Notes purchased. Holders whose Notes are
purchased only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.
On the Net Proceeds Payment Date, the Company shall (i) accept for payment
Notes or portions thereof tendered pursuant to a Net Proceeds Offer in an
aggregate principal amount equal to the Payment Amount or such lesser amount of
Notes as has been tendered, (ii) deposit with the Paying Agent money sufficient
to pay the purchase price of all Notes or portions thereof so tendered in an
aggregate principal amount equal to the Payment Amount or such lesser amount and
(iii) deliver or cause to be delivered to the Trustee the Notes so accepted. The
Paying Agent shall promptly mail or deliver to Holders of the Notes so accepted
payment in an amount equal to the purchase price, and the Company shall execute
and the Trustee will promptly authenticate and mail or make available for
delivery to such Holders a new Note equal
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in principal amount to any unpurchased portion of the Note which any such Holder
did not surrender for purchase. Any Notes not so accepted will be promptly
mailed or delivered to the Holder thereof. The Company shall announce the
results of a Net Proceeds Offer on or as soon as practicable after the Net
Proceeds Payment Date. For purposes of this Section 9.16, the Trustee will act
as the Paying Agent.
(e) The Company shall not permit any Subsidiary to enter into or suffer to
exist any agreement that would place any restriction of any kind (other than
pursuant to law or regulation) on the ability of the Company to make a Net
Proceeds Offer following any Asset Sale.
Section 9.17 Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, enter into or suffer to exist any transaction or series
of related transactions (including, without limitation, the sale, purchase,
exchange or lease of assets, property or the rendering of any services) with, or
for the benefit of, any Affiliate of the Company other than a Restricted
Subsidiary (each, other than a Restricted Subsidiary, being an "Interested
Person"), unless (a) such transaction or series of transactions is on terms that
are no less favorable to the Company or such Restricted Subsidiary, as the case
may be, than those that would be available in a comparable arm's length
transaction with unrelated third parties who are not Interested Persons, (b)
with respect to any one transaction or series of transactions involving
aggregate payments in excess of $5,000,000, the Company delivers an Officers'
Certificate to the Trustee certifying that such transaction or series of
transactions complies with clause (a) above and such transaction or series of
transactions has been approved by the Board of Directors of the Company and (c)
with respect to any one transaction or series of transactions involving
aggregate payments in excess of $25,000,000, the Officers' Certificate referred
to in clause (b) above also certifies that such transaction or series of
transactions has been approved by a majority of the Disinterested Directors or,
in the event there are no such Disinterested Directors, that the Company has
obtained a written opinion from an independent nationally recognized investment
banking firm or appraisal firm, in either case specializing or having a
specialty in the type and subject matter of the transaction or series of
transactions at issue, which opinion shall be to the effect set forth in clause
(a) above or shall state that such transaction or series of transactions is fair
from a financial point of view to the Company or such Restricted Subsidiary;
provided, however, that this covenant will not restrict the Company from (i)
paying reasonable and customary regular compensation and fees to directors of
the Company who are not employees of the Company or any Restricted Subsidiary or
(ii) paying dividends on, or making distributions with respect to, shares of
Capital Stock of the Company on a pro rata basis to the extent permitted by
Section 9.13 hereof.
Section 9.18 Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary to (a) pay dividends, in cash or otherwise, or make
any other distributions on or in respect of its Capital
72
Stock to the Company or any Restricted Subsidiary, (b) pay any Indebtedness owed
to the Company or any Restricted Subsidiary, (c) make an Investment in the
Company or any Restricted Subsidiary or (d) transfer any of its properties or
assets to the Company or any Restricted Subsidiary, except for such encumbrances
or restrictions (i) pursuant to an agreement in effect or entered into on the
Issue Date, (ii) any agreement or other instrument of a Person acquired by the
Company or any Restricted Subsidiary in existence at the time of such
acquisition (but not created in contemplation thereof), which encumbrance or
restriction is not applicable to any other Person, or the properties or assets
of any other Person, other than the Person, or the property or assets of the
Person, so acquired or (iii) existing under any agreement that extends, renews,
refinances or replaces the agreements containing the restrictions in the
foregoing clauses (i) and (ii), provided that the terms and conditions of any
such restrictions are not materially less favorable to the Holders of the
Securities than those under or pursuant to the agreement evidencing the
Indebtedness so extended, renewed, refinanced or replaced.
Section 9.19 Limitation on Sale/Leaseback Transactions.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale/Leaseback Transaction with any Person
(other than the Company or any Wholly Owned Restricted Subsidiary) unless either
(i) the Company or such Restricted Subsidiary, as the case may be, at the date
of determination would be able to incur Indebtedness secured by a Lien on the
Property subject to such Sale/Leaseback Transaction without equally and ratably
securing the Notes or (ii) the Company, within six months after such
transaction, applies an amount equal to the Attributable Indebtedness of such
transaction in the same manner and to the same extent as Net Cash Proceeds from
an Asset Sale are applied pursuant to Section 9.16.
Section 9.20 Limitation on Conduct of Business.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in the conduct of any business other than the Oil and
Gas Business, except that the Company and the Restricted Subsidiaries may engage
in any business other than the Oil and Gas Business, provided that the
consolidated assets of the Company and the Restricted Subsidiaries used in such
business shall not exceed, at any time, 10% of Adjusted Consolidated Net
Tangible Assets.
Section 9.21 Termination of Covenants.
From and after the time that the Notes have received an Investment Grade
Rating from both Rating Agencies (the "Covenant Termination Date"), so long as
no Default has occurred and is continuing, upon delivery to the Trustee of
notice to such effect the Company and the Restricted Subsidiaries shall no
longer be subject to Sections 9.12, 9.13, 9.14, 9.16 (except for purposes of
clause (ii) of Section 9.19), 9.17, 9.18 and 9.20 and clause (d) of Section 7.1
(collectively, the "Terminated Covenants"); provided, however, that all other
provisions of this Indenture shall continue to be in full force and effect. From
and after the Covenant Termination Date, solely for purposes of Section 9.10,
the Permitted Liens described in clauses (x) and (bb) of that definition shall
be Permitted Liens only to the extent that they secure Indebtedness not
exceeding, at the time of determination, 10% of Adjusted Consolidated Net
Tangible Assets.
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ARTICLE X
REDEMPTION OF NOTES
Section 10.1 Redemption and Repurchase.
(a) There shall be no sinking fund for the retirement of the Notes or other
mandatory redemption obligation.
(b) The Company, at its option, may redeem the Notes in accordance with the
provisions of the Notes and this Indenture, including, without limitation,
Section 10.8.
(c) The Company, at the option of the Holders thereof, shall repurchase the
Notes in accordance with the provisions of and at the Change of Control Purchase
Price or the Offered Price, as the case may be, set forth in the Notes and in
accordance with the provisions of this Indenture, including, without limitation,
Sections 9.15 and 9.16.
Section 10.2 Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Notes shall be evidenced by a
Board Resolution. In case of any redemption at the election of the Company, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), furnish
to the Trustee an Officers' Certificate setting forth such Redemption Date, the
Redemption Price and, if less than all the Notes are to be redeemed, the
principal amount of Notes to be redeemed and shall deliver to the Trustee such
documentation and records as shall enable the Trustee to select the Notes to be
redeemed pursuant to Section 10.3. Any election to redeem Notes shall be
revocable until the Company gives a notice of redemption pursuant to Section
10.4 to the Holders of Notes to be redeemed.
Section 10.3 Selection by Trustee of Notes to Be Redeemed.
If less than all the Notes are to be redeemed, the particular Notes to be
redeemed shall be selected not less than 30 days nor more than 60 days prior to
the Redemption Date by the Trustee, from the Outstanding Notes not previously
called for redemption, pro rata, by lot or by any other method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions of the principal of Notes; provided, however, that any
such partial redemption shall be in integral multiples of $1,000.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Notes selected for partial
redemption, the principal amount thereof to be redeemed.
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For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Notes shall relate, in the case of any
Note redeemed or to be redeemed only in part, to the portion of the principal
amount of such Note which has been or is to be redeemed.
Section 10.4 Notice of Redemption.
Notice of redemption shall be given in the manner provided for in Section
13.5 not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Notes to be redeemed.
All notices of redemption shall identify the Notes to be redeemed
(including CUSIP number) and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Notes are to be redeemed, the
identification (and, in the case of a partial redemption of any series, the
principal amounts) of the particular Notes to be redeemed;
(d) that on the Redemption Date the Redemption Price (together with accrued
interest to the Redemption Date payable as provided in Section 10.6) will become
due and payable upon each such Note, or the portion thereof, to be redeemed, and
that, unless the Company shall default in the payment of the Redemption Price
and any applicable accrued interest, interest thereon will cease to accrue on
and after said date; and
(e) the place or places where such Notes are to be surrendered for payment
of the Redemption Price.
Notice of redemption of Notes to be redeemed at the election of the Company
shall be given by the Company or, at the Company's request, by the Trustee in
the name and at the expense of the Company. Notice, if given in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the Holder receives such notice. In any case, failure to give such notice
or any defect therein to the Holder of any Note shall not affect the validity of
any proceedings for the redemption of any other Note.
Section 10.5 Deposit of Redemption Price.
On or before 11:00 A.M., New York City time, on any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 9.3) an amount of money sufficient to pay the Redemption
Price of, and accrued and unpaid interest on, all the Notes which are to be
redeemed on such Redemption Date.
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Section 10.6 Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified (together with accrued and unpaid interest to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued and unpaid interest) such
Notes shall cease to bear interest. Upon surrender of any such Note for
redemption in accordance with said notice, such Note shall be paid by the
Company at the Redemption Price, together with accrued and unpaid interest to
the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Notes, or one or more Predecessor Securities, registered as such
at the close of business on the relevant Record Dates according to their terms
and the provisions of Section 2.11.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Note.
Section 10.7 Notes Redeemed in Part.
Any Note which is to be redeemed only in part shall be surrendered at the
office or agency of the Company maintained for such purpose pursuant to Section
9.2 (with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge, a
new Note or Notes of like tenor, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal amount of the Note so surrendered.
Section 10.8 Optional Redemption at Make-Whole Price.
At any time and from time to time, the Company may, at its option, redeem
all or any portion of the Notes at the Make-Whole Price plus accrued and unpaid
interest on the Notes so redeemed to the Redemption Date. Any redemption
pursuant to this Section 10.8 shall be made, to the extent applicable, pursuant
to the provisions of Sections 10.2 through 10.7 hereof.
ARTICLE XI
DEFEASANCE AND COVENANT DEFEASANCE
Section 11.1 Company's Option to Effect Defeasance or Covenant Defeasance.
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The Company may, at its option by Board Resolution, at any time, elect to
have either Section 11.2 or Section 11.3 hereof be applied to all Outstanding
Notes upon compliance with the conditions set forth below in this Article XI.
Section 11.2 Defeasance and Discharge.
Upon the Company's exercise under Section 11.1 hereof of the option
applicable to this Section 11.2, the Company shall be deemed to have been
discharged from its obligations with respect to all Outstanding Notes on the
date the conditions set forth in Section 11.4 hereof are satisfied (hereinafter,
"legal defeasance"). For this purpose, such legal defeasance means that the
Company and the Subsidiary Guarantors shall be deemed (a) to have paid and
discharged their respective obligations under the Outstanding Notes; provided,
however, that the Notes shall continue to be deemed to be "Outstanding" for
purposes of Section 11.5 hereof and the other Sections of this Indenture
referred to in clauses (i) and (ii) below, and (b) to have satisfied all their
other obligations under such Notes and this Indenture (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (i) the rights of Holders of Outstanding Notes to
receive, solely from the trust fund described in Section 11.4 hereof and as more
fully set forth in such Section, payments in respect of the principal of (and
premium, if any, on) and interest on such Notes when such payments are due (or
at such time as the Notes would be subject to redemption at the option of the
Company in accordance with this Indenture), (ii) the respective obligations of
the Company and any Subsidiary Guarantors under Sections 2.3, 2.5, 2.6, 2.7,
2.9, 2.10, 4.8, 4.14, 5.6, 5.9, 5.10, 9.1, 9.2, 9.3 and 9.4 hereof, (iii) the
rights, powers, trusts, duties and immunities of the Trustee hereunder, and (iv)
the obligations of the Company and any Subsidiary Guarantors under this Article
XI. Subject to compliance with this Article XI, the Company may exercise its
option under this Section 11.2 notwithstanding the prior exercise of its option
under Section 11.3 hereof.
Section 11.3 Covenant Defeasance.
Upon the Company's exercise under Section 11.1 hereof of the option
applicable to this Section 11.3, (i) the Company shall be released from its
obligations under any covenant contained in Article VII and in Sections 9.5
through 9.20 hereof, and (ii) the Subsidiary Guarantors shall be released from
their obligations under Article XIV, in both cases on and after the date the
conditions set forth below are satisfied (hereinafter, "covenant defeasance"),
and the Notes shall thereafter be deemed not to be "Outstanding" for the
purposes of any direction, waiver, consent, declaration or other 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. For
this purpose, such covenant defeasance means that 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 Sections 4.1(c) or 4.1(d) hereof, but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby.
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Section 11.4 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 11.2
or Section 11.3 hereof to the Outstanding Notes:
(a) The Company or any Subsidiary Guarantor shall irrevocably have
deposited or caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 5.7 hereof who shall agree to comply with
the provisions of this Article XI applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such Notes, (i) cash
in U.S. Dollars in an amount, or (ii) U.S. Government Obligations which through
the scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due date of any
payment, money in an amount, or (iii) a combination thereof, sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge, and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, the principal of (and premium, if any, on) and
interest on the Outstanding Notes on the Stated Maturity (or Redemption Date, if
applicable) of such principal (and premium, if any) or installment of interest;
provided that the Trustee shall have been irrevocably instructed in writing by
the Company to apply such money or the proceeds of such U.S. Government
Obligations to said payments with respect to the Notes. Before such a deposit,
the Company may give to the Trustee, in accordance with Section 10.2 hereof, a
notice of its election to redeem all of the Outstanding Notes at a future date
in accordance with Article X hereof, which notice shall be irrevocable. Such
irrevocable redemption notice, if given, shall be given effect in applying the
foregoing. For this purpose, "U.S. Government Obligations" means securities that
are (x) direct obligations of the United States of America for the timely
payment of which its full faith and credit is pledged or (y) 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 U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation 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 U.S. Government Obligation or the specific
payment of principal of or interest on the U.S. Government Obligation evidenced
by such depository receipt.
(b) No Default or Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit.
(c) Such legal defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest under this Indenture or the Trust
Indenture Act with respect to any securities of the Company.
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(d) Such legal defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under any other material
agreement or instrument to which the Company or any Subsidiary Guarantor is a
party or by which it is bound, as evidenced to the Trustee in an Officers'
Certificate delivered to the Trustee concurrently with such deposit.
(e) In the case of an election under Section 11.2 hereof, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling, or (ii) since the date of this Indenture there has been a change in
the applicable federal income tax laws; in either case providing that the
Holders of the Outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such legal defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such legal defeasance had not occurred
(it being understood that (x) such Opinion of Counsel shall also state that such
ruling or applicable law is consistent with the conclusions reached in such
Opinion of Counsel and (y) the Trustee shall be under no obligation to
investigate the basis of correctness of such ruling).
(f) In the case of an election under Section 11.3 hereof, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such covenant defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such covenant defeasance had not
occurred.
(g) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the legal defeasance under Section
11.2 hereof or the covenant defeasance under Section 11.3 (as the case may be)
have been complied with.
Section 11.5 Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 9.3 hereof, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee--collectively for purposes of this
Section 11.5, the "Trustee") pursuant to Section 11.4 hereof in respect of the
Outstanding Notes 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 its own Paying Agent) as the Trustee may determine, to the Holders of
such Notes of all sums due and to become due thereon in respect of principal
(and premium, if any) and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to Section 11.4 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.
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Anything in this Article XI to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 11.4
hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent legal defeasance or covenant defeasance, as
applicable, in accordance with this Article.
Section 11.6 Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 11.5 hereof by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's and the Subsidiary Guarantors' obligations
under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 11.2 or 11.3 hereof, as the case may
be, until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 11.5 hereof; provided, however, that if
the Company or any Subsidiary Guarantor makes any payment of principal of (or
premium, if any, on) or interest on any Note following the reinstatement of its
obligations, the Company or such Subsidiary Guarantor shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money held
by the Trustee or Paying Agent."
ARTICLE XII
CONVERSION
Section 12.1 No Conversion .
The Notes shall not be convertible into any other securities.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act or this Indenture. Each such certificate and each such opinion
shall be in the form of an Officers' Certificate or an Opinion of Counsel, as
applicable, and shall comply with the requirements of this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
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(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) 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;
(iii) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
The certificates and opinions provided pursuant to this Section 13.1 and
the statements required by this Section 13.1 shall comply in all respects with
TIA Sections 314(c) and (e).
Section 13.2 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such Opinion of Counsel may be based, insofar as it relates to
factual matters, upon an Officers' Certificate of an Officer or Officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate with respect to such matters
is erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 13.3 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and
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evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agents duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of authority.
The fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.
(c) The ownership, principal amount and serial numbers of Notes held by any
Person, and the date of holding the same, shall be proved by the Security
Register.
(d) If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. Notwithstanding TIA Section 316(c), such
record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Notes have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other Act,
and for that purpose the Outstanding Notes shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than eleven months after
the record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Note shall bind every future Holder of the
same Note and the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Note.
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Section 13.4 Notices, etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(i) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
and delivered in person or mailed by certified or registered mail (return
receipt requested) to the Trustee at its Corporate Trust Office; or
(ii) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and delivered in person or mailed by certified or registered
mail (return receipt requested) to the Company addressed to it at the
Company's principal office located at 000 Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx
00000, or at any other address otherwise furnished in writing to the
Trustee by the Company.
Section 13.5 Notice to Holders; Waiver.
Where this Indenture provides for notice of any event to Holders by the
Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
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Section 13.6 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 13.7 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not. All agreements of the
Trustee in this Indenture shall bind its successor.
Section 13.8 Separability Clause.
In case any provision in this Indenture or in the Securities of any series
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 a Holder shall have no claim therefore against any party
hereto.
Section 13.9 Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall give
to any Person (other than the parties hereto, any Paying Agent, any Securities
Registrar and their successors hereunder and the Holders) any benefit or any
legal or equitable right, remedy or claim under this Indenture.
Section 13.10 Governing Law; Trust Indenture Act Controls.
(a) THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE TRUST
INDENTURE ACT IS APPLICABLE. THE COMPANY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES, AND THE
COMPANY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED BY ANY SUCH COURT.
(b) Whether prior to or following the qualification of this Indenture under
the Trust Indenture Act, if and to the extent that any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by operation of
Section 318(c) of the Trust Indenture Act upon an indenture qualified under the
TIA, such imposed duties shall control.
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Section 13.11 Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, or Stated
Maturity or Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of interest or principal (and premium, if any) need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the Interest Payment Date, Redemption Date or at the Stated
Maturity or Maturity; provided that no interest shall accrue for the period from
and after such Interest Payment Date, Redemption Date, Stated Maturity or
Maturity, as the case may be.
Section 13.12 No Recourse Against Others.
A director, officer, employee or stockholder of the Company or any
Subsidiary Guarantor shall not have any liability, by reason of his or its
status as such director, officer, employee or stockholder, for any obligations
of the Company or any Subsidiary Guarantor under the Notes, any Subsidiary
Guarantee or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder, by accepting any
Note, waives and releases all such liability to the extent permitted by
applicable law.
Section 13.13 Duplicate Originals.
The parties may sign any number of copies or counterparts of this
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.
Section 13.14 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
ARTICLE XIV
GUARANTEES
Section 14.1 Unconditional Guarantee.
Each Restricted Subsidiary that hereafter becomes a Subsidiary Guarantor
shall unconditionally, jointly and severally, guarantee (each such guarantee to
be referred to herein as a "Subsidiary Guarantee," with all such guarantees
being referred to herein as the "Subsidiary Guarantees") to each Holder of Notes
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, the full and prompt performance of the Company's obligations under
this Indenture and the Notes and that:
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(a) the principal of (or premium, if any, on) and interest on the Notes
will be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest
on the Notes, if any, to the extent lawful, and all other obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and
(b) in case of any extension of time of payment or renewal of any Notes or
of any such other obligations, the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at Stated Maturity, by acceleration or otherwise;
subject, however, in the case of clauses (a) and (b) above, to the limitations
set forth in Section 14.4 hereof.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and
severally obligated to pay the same immediately. The obligations of each
Subsidiary Guarantor hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each Subsidiary Guarantor shall waive diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and shall
covenant that its Subsidiary Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes, this Indenture and in the
Subsidiary Guarantee. If any Holder or the Trustee is required by any court or
otherwise to return to the Company, any Subsidiary Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or any Subsidiary Guarantor, any amount paid by the Company or any Subsidiary
Guarantor to the Trustee or such Holder, the Subsidiary Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. No
Subsidiary Guarantor shall be entitled to any right of subrogation in relation
to the Holders in respect of any obligations guaranteed by the Subsidiary
Guarantee until payment in full of all obligations guaranteed thereby. Each
Subsidiary Guarantor shall further agree that, as between each Subsidiary
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the obligations guaranteed by the Subsidiary Guarantee may
be accelerated as provided in Article IV hereof for the purposes of the
Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed by the
Subsidiary Guarantee, and (ii) in the event of any acceleration of such
obligations as provided in Article IV hereof, such obligations (whether or not
due and payable) shall forthwith become due and payable by each Subsidiary
Guarantor for the purpose of the Subsidiary Guarantee.
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Section 14.2 Subsidiary Guarantors May Consolidate, etc. on Certain Terms.
(a) Except as set forth in Articles VII and IX hereof, nothing contained in
this Indenture or in any of the Notes shall prevent any consolidation or merger
of a Subsidiary Guarantor with or into the Company or another Subsidiary
Guarantor or shall prevent any sale or conveyance of the assets of a Subsidiary
Guarantor as an entirety or substantially as an entirety, to the Company or
another Subsidiary Guarantor.
(b) Except as set forth in Articles VII and IX hereof, nothing contained in
this Indenture or in any of the Notes shall prevent any consolidation or merger
of a Subsidiary Guarantor with or into a Person or Persons other than the
Company or a Subsidiary Guarantor (whether or not affiliated with the Subsidiary
Guarantor), or successive consolidations or mergers in which a Subsidiary
Guarantor or its successor or successors shall be a party or parties, or shall
prevent any sale or conveyance of the Properties of a Subsidiary Guarantor as an
entirety or substantially as an entirety, to a Person other than the Company or
another Subsidiary Guarantor (whether or not Affiliated with the Subsidiary
Guarantor) authorized to acquire and operate the same; provided, however, that,
subject to Sections 14.2(a) and 14.3 hereof, (A) immediately after such
transaction, and giving effect thereto, no Default or Event of Default shall
have occurred as a result of such transaction and be continuing, (B) such
transaction shall not violate any of the covenants in Sections 9.1 through 9.20
hereof, and (C) each Subsidiary Guarantor shall covenant and agree that, upon
any such consolidation or merger, such Subsidiary Guarantor's Subsidiary
Guarantee set forth in this Article XIV, and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by such Subsidiary Guarantor, shall be expressly assumed (in the event
that the Subsidiary Guarantor is not the surviving Person in the merger), by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by such Person formed by such consolidation, or into
which the Subsidiary Guarantor shall have merged (except to the extent the
following Section 14.3 would result in the release of such Subsidiary Guarantee
in which case such surviving Person does not have to execute any such
supplemental indenture). In the case of any such consolidation or merger, and
upon the assumption by the successor Person, by supplemental indenture executed
and delivered to the Trustee and satisfactory in form to the Trustee of the due
and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Subsidiary Guarantor, such successor Person
shall succeed to and be substituted for the Subsidiary Guarantor with the same
effect as if it had been named herein as a Subsidiary Guarantor.
Section 14.3 Release of a Subsidiary Guarantor.
The Subsidiary Guarantee of any Restricted Subsidiary may be released upon
the terms and subject to the conditions set forth in Sections 9.12(c), 11.2 and
11.3 hereof. Each Subsidiary Guarantor that is designated as an Unrestricted
Subsidiary in accordance with the provisions of this Indenture shall be released
from all of its Subsidiary Guarantee and related obligations set forth in this
Indenture for so long as it remains an Unrestricted Subsidiary. The Trustee
shall deliver an appropriate instrument evidencing such release upon receipt of
a Company Request accompanied by an Officers' Certificate and an Opinion of
Counsel certifying that such sale or other disposition was made by the Company
in accordance with the provisions of this Indenture.
87
Any Subsidiary Guarantor not so released remains liable for the full amount of
principal of (and premium, if any, on) and interest on the Notes as provided in
this Article XIV.
Section 14.4 Limitation of Subsidiary Guarantor's Liability.
Each Subsidiary Guarantor shall confirm, and by its acceptance hereof each
Holder hereby confirms, that it is the intention of all such parties that the
Guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee not
constitute a fraudulent transfer or conveyance for purposes of any federal or
state law. To effectuate the foregoing intention, the Holders hereby irrevocably
agree, and each Subsidiary Guarantor shall irrevocably agree, that the
obligations of each Subsidiary Guarantor under its Subsidiary Guarantee shall be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under its Subsidiary Guarantee or pursuant to Section 14.5 hereof,
result in the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee not constituting a fraudulent conveyance or fraudulent transfer under
federal or state law. This Section 14.4 is for the benefit of the creditors of
each Subsidiary Guarantor.
Section 14.5 Contribution.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors shall agree, inter se, that in
the event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under its Subsidiary Guarantee, such Funding Guarantor
shall be entitled to a contribution from each other Subsidiary Guarantor (if
any) in a pro rata amount based on the Adjusted Net Assets of each Subsidiary
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Notes or any other Subsidiary Guarantor's
obligations with respect to its Subsidiary Guarantee.
Section 14.6 Execution and Delivery of Evidence of Subsidiary Guarantee.
To evidence the Subsidiary Guarantee set forth in Section 14.1 hereof, the
Company shall cause this Indenture or a supplemental indenture to be executed on
behalf of each Subsidiary Guarantor by its President or one of its Vice
Presidents.
Section 14.7 Severability.
In case any provision of the Subsidiary Guarantee shall be invalid, illegal
or unenforceable, that portion of such provision that is not invalid, illegal or
unenforceable shall remain in effect, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
88
Section 14.8 Payment.
For purposes of this Article XIV, a payment with respect to any Subsidiary
Guarantee or with respect to principal of or interest on any Note or any
Subsidiary Guarantee shall include, without limitation, payment of principal of
and interest on any Note, any depositing of funds under Article III, IV or XI
hereof, any payment on account of any repurchase or redemption of any Note and
any payment or recovery on any claim (whether for rescission or damages and
whether based on contract, tort, duty imposed by law, or any other theory of
liability) relating to or arising out of the offer, sale or purchase of any
Note.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
ISSUER:
XTO ENERGY INC.,
a Delaware corporation
By: /s/ Xxxx O'Rear
---------------------------------
TRUSTEE:
THE BANK OF NEW YORK,
as Trustee
By: /s/ XXXX XXXXX
---------------------------------
89
RULE 144A/REGULATION S APPENDIX
PROVISIONS RELATING TO INITIAL NOTES,
PRIVATE EXCHANGE NOTES
AND EXCHANGE NOTES
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Depository" means The Depository Trust Company, its nominees and
their respective successors.
"Exchange Notes" means (1) the 6 1/4% Senior Subordinated Notes due
2013 issued pursuant to the Indenture in connection with the Registered Exchange
Offer pursuant to a Registration Rights Agreement and (2) Additional Notes, if
any, issued pursuant to a registration statement filed with the SEC under the
Securities Act.
"Initial Purchasers" means (1) with respect to the Initial Notes
issued on the Issue Date, Xxxxxx Brothers Inc., X.X. Xxxxxx Securities Inc.,
Citigroup Global Markets Inc., Xxxxxxx, Xxxxx & Co., ABN AMRO Incorporated, BNP
Paribas Securities Corp., Banc One Capital Markets, Inc., Wachovia Securities,
Inc., BMO Xxxxxxx Xxxxx Corp., BNY Capital Markets, Inc. and Scotia Capital
(USA) Inc. and (2) with respect to each issuance of Additional Notes, the
Persons purchasing such Additional Notes under the related Purchase Agreement.
"Initial Notes" means (1) $400 million aggregate principal amount of 6
1/4% Senior Notes due 2013 issued on the Issue Date and (2) Additional Notes, if
any, issued in a transaction exempt from the registration requirements of the
Securities Act.
"Notes" means the Initial Notes, the Exchange Notes and the Private
Exchange Notes, treated as a single class.
"Private Exchange" means the offer by the Company, pursuant to a
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Notes held by the Initial
Purchaser as part of its initial distribution, a like aggregate principal amount
of Private Exchange Notes.
"Private Exchange Notes" means any 6 1/4% Senior Notes due 2013 issued
in connection with a Private Exchange.
"Purchase Agreement" means (1) with respect to the Initial Notes
issued on the Issue Date, the Purchase Agreement dated April 17, 2003, among the
Company and the Initial Purchasers, and (2) with respect to each issuance of
Additional Notes, the purchase agreement or underwriting agreement among the
Company and the Persons purchasing such Additional Notes.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
App. 1
"Registered Exchange Offer" means the offer by the Company, pursuant
to a Registration Rights Agreement, to certain Holders of Initial Notes, to
issue and deliver to such Holders, in exchange for the Initial Notes, a like
aggregate principal amount of Exchange Notes registered under the Securities
Act.
"Registration Rights Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Registration Rights Agreement dated
April 23, 2003, among the Company and the Initial Purchasers, and (2) with
respect to each issuance of Additional Notes issued in a transaction exempt from
the registration requirements of the Securities Act, the registration rights
agreement, if any, among the Company and the Persons purchasing such Additional
Notes under the related Purchase Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor statute.
"Securities Custodian" means the custodian with respect to a Global
Note (as appointed by the Depository), or any successor Person thereto and shall
initially be the Trustee.
"Shelf Registration Statement" means the registration statement issued
by the Company in connection with the offer and sale of Initial Notes or Private
Exchange Notes pursuant to a Registration Rights Agreement.
"Transfer Restricted Notes" means Notes that bear or are required to
bear the legend set forth in Section 2.3(b) hereto.
1.2 Other Definitions
Defined in
Term Section:
---- ----------
"Agent Members".........................................................2.1(b)
"Global Note"...........................................................2.1(a)
"Regulation S"..........................................................2.1(a)
"Restricted Global Note"................................................2.1(a)
"Rule 144A".............................................................2.1(a)
2. The Notes.
2.1 (a) Form and Dating. Initial Notes offered and sold to a QIB in
reliance on Rule 144A under the Securities Act ("Rule 144A") or in reliance on
Regulation S under the Securities Act ("Regulation S"), in each case as provided
in a Purchase Agreement, and Private Exchange Notes, as provided in a
Registration Rights Agreement, shall be issued initially in the form of one or
more permanent global Notes in definitive, fully registered form without
interest coupons with the global securities legend and restricted securities
legend set forth in Exhibit 1 hereto (each, a "Restricted Global Note"), which
shall be deposited on behalf of the purchasers of the Initial Notes represented
thereby with the Trustee, at its principal corporate trust office, as custodian
for the Depository (or with such other custodian as the Depository may direct),
and registered in the name of the Depository or a nominee of the Depository,
duly executed by the
App. 2
Company and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depository
or its nominee as hereinafter provided. Exchange Notes shall be issued in global
form (with the global securities legend set forth in Exhibit 1 hereto) or in
certificated form at the option of the Holders thereof from time to time.
Exchange Notes issued in global form and Restricted Global Notes are sometimes
referred to in this Appendix as "Global Notes."
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Note deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global Notes
that (a) shall be registered in the name of the Depository for such Global Note
or Global Notes or the nominee of such Depository and (b) shall be delivered by
the Trustee to such Depository or pursuant to such Depository's instructions or
held by the Trustee as custodian for the Depository.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Note, and the Company, the Trustee and any agent
of the Company or the Trustee shall be entitled to treat the Depository as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Note.
(c) Certificated Notes. Except as provided in this Section 2.1 or
Section 2.3 or 2.4, owners of beneficial interests in Restricted Global Notes
shall not be entitled to receive physical delivery of certificated Notes.
2.2 Authentication. The Trustee shall authenticate and deliver: (1) on the
Issue Date, an aggregate principal amount of $400 million 6 1/4% Senior Notes
due 2013, (2) from time to time after the Issue Date, any Additional Notes for
an original issue in an aggregate principal amount specified in the written
order of the Company pursuant to Section 2.2 of the Indenture and (3) Exchange
Notes or Private Exchange Notes for issue only in a Registered Exchange Offer or
a Private Exchange, respectively, pursuant to a Registration Rights Agreement,
for a like principal amount of Initial Notes, in each case upon a written order
of the Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company. Such order shall specify the
amount of the Notes to be authenticated and the date on which the original issue
of Notes is to be authenticated and, in the case of any issuance of Additional
Notes pursuant to Section 2.13 of the Indenture, shall certify that such
issuance is in compliance with Section 9.14 of the Indenture.
App. 3
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. (i) The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depository therefor. A transferor of a beneficial interest in a Global Note
shall deliver to the Registrar a written order given in accordance with the
Depositary's procedures containing information regarding the participant account
of the Depositary to be credited with a beneficial interest in the Global Note.
The Registrar shall, in accordance with such instructions instruct the
Depository to credit to the account of the Person specified in such instructions
a beneficial interest in the Global Note and to debit the account of the Person
making the transfer the beneficial interest in the Global Note being
transferred.
(ii) Notwithstanding any other provisions of this Appendix (other than
the provisions set forth in Section 2.4), a Global Note may not be transferred
as a whole except by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the Depository
or by the Depository or any such nominee to a successor Depository or a nominee
of such successor Depository.
(iii) In the event that a Restricted Global Note is exchanged for
Notes in certificated registered form pursuant to Section 2.4 of this Appendix,
prior to the consummation of a Registered Exchange Offer or the effectiveness of
a Shelf Registration Statement with respect to such Notes, such Notes may be
exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Notes intended to ensure
that such transfers comply with Rule 144A or Regulation S, as the case may be)
and such other procedures as may from time to time be adopted by the Company.
(b) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), until the expiration of the applicable holding period with respect to
the Notes set forth in Rule 144(k) of the Securities Act, each Note
certificate evidencing the Restricted Global Notes (and all Notes issued in
exchange therefor or in substitution thereof) shall bear a legend in
substantially the following form:
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
App. 4
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT
TO EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
(ii) Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by a Restricted Global
Note) pursuant to Rule 144 under the Securities Act, the Registrar shall
permit the transferee thereof to exchange such Transfer Restricted Note for
a certificated Note that does not bear the legend set forth above and
rescind any restriction on the transfer of such Transfer Restricted Note,
if the transferor thereof certifies in writing to the Registrar that such
sale or transfer was made in reliance on Rule 144 (such certification to be
in the form set forth on the reverse of the Note).
(iii) After a transfer of any Initial Notes or Private Exchange Notes
pursuant to and during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial Notes or Private
Exchange Notes, as the case may be, all requirements pertaining to legends
on such Initial Note or such Private Exchange Note will cease to apply, the
requirements requiring any such Initial Note or such Private Exchange Note
issued to certain Holders be issued in global form will cease to apply, and
a certificated Initial Note or Private Exchange Note or an Initial Note or
Private Exchange Note in global form, in each case without restrictive
transfer legends, will be available to the transferee of the Holder of such
Initial Notes or Private Exchange Notes upon exchange of such transferring
Holder's certificated Initial Note or Private Exchange Note or directions
to transfer such Holder's interest in the Global Note, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with respect
to the Initial Notes, all requirements pertaining to such Initial Notes
that Initial Notes issued to certain Holders be issued in global form will
still apply with respect to Holders of such Initial Notes that do not
exchange their Initial Notes, and Exchange Notes in certificated or global
form will be available to Holders that exchange such Initial Notes in such
Registered Exchange Offer.
App. 5
(v) Upon the consummation of a Private Exchange with respect to the
Initial Notes, all requirements pertaining to such Initial Notes that
Initial Notes issued to certain Holders be issued in global form will still
apply with respect to Holders of such Initial Notes that do not exchange
their Initial Notes, and Private Exchange Notes in global form with the
global securities legend and the Restricted Notes Legend set forth in
Exhibit 1 hereto will be available to Holders that exchange such Initial
Notes in such Private Exchange.
(c) Cancellation or Adjustment of Global Note. At such time as all
beneficial interests in a Global Note have either been exchanged for
certificated Notes, redeemed, purchased or canceled, such Global Note shall be
returned to the Depository for cancellation or retained and canceled by the
Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for certificated Notes, redeemed, purchased or
canceled, the principal amount of Notes represented by such Global Note shall be
reduced and an adjustment shall be made on the books and records of the Trustee
(if it is then the Notes Custodian for such Global Note) with respect to such
Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.
(d) Obligations with Respect to Transfers and Exchanges of Notes.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate certificated Notes and
Global Notes at the Registrar's or co-registrar's request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge payable
in connection therewith (other than any such transfer taxes, assessments or
similar governmental charge payable upon exchange or transfer pursuant to
Sections 8.6, 9.15 and 10.7 of the Indenture).
(iii) The Registrar or co-registrar shall not be required to register
the transfer of or exchange of any Note for a period beginning 15 Business
Days before the mailing of a notice of an offer to repurchase or redeem
Notes or 15 Business Days before an interest payment date.
(iv) Prior to the due presentation for registration of transfer of any
Note, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Note is
registered as the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Note and for all other
purposes whatsoever, whether or not such Note is overdue, and none of the
Company, the Trustee, the Paying Agent, the Registrar or any co-registrar
shall be affected by notice to the contrary.
(v) All Notes 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 Notes surrendered upon
such transfer or exchange.
App. 6
(e) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Note, a member of, or a participant in, the
Depository or other Person with respect to the accuracy of the records of
the Depository or its nominee or of any participant or member thereof, with
respect to any ownership interest in the Notes or with respect to the
delivery to any participant, member, beneficial owner or other Person
(other than the Depository) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such
Notes. All notices and communications to be given to the Holders and all
payments to be made to Holders under the Notes shall be given or made only
to or upon the order of the registered Holders (which shall be the
Depository or its nominee in the case of a Global Note). The rights of
beneficial owners in any Global Note shall be exercised only through the
Depository subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its members,
participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any transfers between or
among Depository participants, members or beneficial owners in any Global
Note) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and
when expressly required by, the terms of this Indenture, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.
2.4 Certificated Notes.
(a) A Restricted Global Note deposited with the Depository or with the
Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated Notes
in an aggregate principal amount equal to the principal amount of such Global
Note, in exchange for such Global Note, only if such transfer complies with
Section 2.3 and (i) the Depository notifies the Company that it is unwilling or
unable to continue as Depository for such Restricted Global Note or if at any
time such Depository ceases to be a "clearing agency" registered under the
Exchange Act and, in either case, a successor depositary is not appointed by the
Company within 90 days of such notice, (ii) an Event of Default has occurred and
is continuing and the Depository requests the Trustee or the Company that
certificated Notes be issued or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Notes under this Indenture.
(b) Any Restricted Global Note that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depository to the Trustee located at its principal corporate trust office in the
Borough of Manhattan, The City of New York, to be so transferred, in whole or
from time to time in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Restricted Global Note,
an equal aggregate principal amount of certificated Initial Notes of authorized
denominations. Any
App. 7
portion of a Restricted Global Note transferred pursuant to this Section shall
be executed, authenticated and delivered only in denominations of $1,000
principal amount and any integral multiple thereof and registered in such names
as the Depository shall direct. Any certificated Initial Note or Private
Exchange Note delivered in exchange for an interest in the Restricted Global
Note shall, except as otherwise provided by Section 2.3(b), bear the restricted
securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered Holder
of a Global Note shall be entitled to 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 Notes.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a), the Company shall promptly make available to the Trustee a
reasonable supply of certificated Notes in definitive, fully registered form
without interest coupons.
App. 8
EXHIBIT 1
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF INITIAL NOTE]
[Global Note Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE 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 NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN
THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT
TO AN EFFECTIVE
I-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH
(IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
I-2
No. CUSIP No.
------------- ---------
ISIN No.
--------
$_______
6 1/4% Senior Notes due 2013
XTO Energy Inc., a Delaware corporation, promises to pay to Cede &
Co., or registered assigns, the principal sum of Dollars on April 15,
---------
2013.
Interest Payment Dates: April 15 and October 15.
Record Dates: April 1 and October 1.
Additional provisions of this Note are set forth on the other side of
this Note.
I-3
IN WITNESS WHEREOF, XTO Energy Inc. caused this instrument to be duly
executed.
XTO ENERGY INC.
by
------------------------------------
Name:
Title:
I-4
Dated:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
THE BANK OF NEW YORK
as Trustee, certifies
that this is one of
the Notes referred
to in the Indenture.
by
--------------------------------
Authorized Signatory
I-5
[FORM OF REVERSE SIDE OF INITIAL NOTE]
6 1/4% Senior Note due 2013
1. Interest
XTO Energy Inc, a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Note at the rate per annum shown above; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
liquidated damages by way of additional interest will accrue on this Note at a
rate of 0.25% per annum (increasing by an additional 0.25% per annum after each
consecutive 90-day period that occurs after the date on which such Registration
default occurs up to a maximum additional interest rate of 1.50%) from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured. The
Company will pay interest semiannually on April 15 and October 15 of each year,
commencing October 15, 2003. Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from April 23, 2003. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment
The Company will pay interest on the Notes (except defaulted interest) to
the Persons who are registered holders of Notes at the close of business on the
April 1 or October 1 next preceding the Interest Payment Date even if Notes are
canceled after the Regular Record Date and on or before the Interest Payment
Date. Holders must surrender Notes to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. Payments in respect of the Notes represented by a Global Note
(including principal, premium and interest) will be made by wire transfer of
immediately available funds to the accounts specified by The Depository Trust
Company. The Company will make all payments in respect of a certificated Note
(including principal, premium and interest) by mailing a check to the registered
address of each Holder thereof; provided, however, that payments on a
certificated Note held by any Holder owning Notes in the principal amount of
$500,000 or more will be made by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent,
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Registrar or co-registrar without notice. The Company or any of its Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Notes under an Indenture dated as of April 23, 2003
("Indenture"), between the Company and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as
in effect on the date of the Indenture (the "Act"). Terms defined in the
Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. The Notes are subject to all such terms, and Holders are referred to
the Indenture and the Act for a statement of those terms.
The Notes are general unsecured obligations of the Company. The Company
shall be entitled, subject to its compliance with Section 9.14 of the Indenture,
to issue Additional Notes pursuant to Section 2.13 of the Indenture. The Initial
Notes issued on the Issue Date, any Additional Notes and all Exchange Notes or
Private Exchange Notes issued in exchange therefor will be treated as a single
class for all purposes under the Indenture. The Indenture contains covenants
that limit the ability of the Company and its subsidiaries to incur additional
indebtedness; pay dividends or distributions on, or redeem or repurchase capital
stock; make investments; engage in transactions with affiliates; create liens on
assets; transfer or sell assets; guarantee indebtedness; restrict dividends or
other payments of subsidiaries; and consolidate, merge or transfer all or
substantially all of its assets and the assets of its subsidiaries. If, after
the Issue Date, the Notes are assigned an Investment Grade Rating from both S&P
and Xxxxx'x and no Default has occurred and is continuing, certain covenants
will be terminated. These covenants are subject to important exceptions and
qualifications as provided in the Indenture.
5. Optional Redemption and Repurchase
The Notes are subject to redemption at the option of the Company, in whole
or in part, at any time and from time to time, upon not less than 30 or more
than 60 days' notice, at a Redemption Price of 100% of their principal amount
plus a Make-Whole Amount, together in the case of any such redemption with
accrued and unpaid interest to the Redemption Date (subject to the right of
Holders of record on the relevant Regular Record Date to receive interest due on
an Interest Payment Date that is on or prior to the Redemption Date), all as
provided in the Indenture.
In the case of any redemption of Notes, interest installments whose Stated
Maturity is on or prior to the Redemption Date will be payable to the Holders of
such Notes, or one or more Predecessor Notes, of record at the close of business
on the relevant Regular Record Date referred to on the face hereof. Notes (or
portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase all or any part
specified by the Holder (so long as the principal amount of such part is $1,000
or an integral multiple of $1,000 in excess thereof) of
I-7
the Notes held by such Holder on a Business Day selected by the Company no
earlier than 30 days nor later than 70 days after the occurrence of a Change of
Control, at a purchase price equal to 101% of the principal amount thereof
together with accrued and unpaid interest to the Change of Control Purchase
Date. The Holder shall have the right to withdraw any Change of Control Purchase
election (in whole or in a portion thereof that is $1,000 or an integral
multiple of $1,000 in excess thereof) at any time prior to the close of business
on the third Business Day next preceding the Change of Control Purchase Date by
delivering a written notice of withdrawal to the Company in accordance with the
terms of the Indenture.
In the event of redemption or purchase of this Note in part only, a new
Note or Notes for the unredeemed or unpurchased portion hereof shall be issued
in the name of the Holder hereof upon the cancellation hereof.
The Notes do not have the benefit of any sinking fund obligations.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Notes to be redeemed at its
registered address. Notes in denominations larger than $1,000 principal amount
may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the Redemption Price of and accrued interest on all Notes (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent by 11:00 A.M., New York City time, on the Redemption Date and
certain other conditions are satisfied, on and after such date interest ceases
to accrue on such Notes (or such portions thereof) called for redemption.
7. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of $1,000
principal amount and whole multiples of $1,000. A Holder may transfer or
exchange Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer or exchange of any Notes
selected for redemption (except, in the case of a Note to be redeemed in part,
the portion of the Note not to be redeemed) or any Notes for a period of 15 days
before a selection of Notes to be redeemed or 15 days before an Interest Payment
Date.
8. Persons Deemed Owners
The registered Holder of this Note may be treated as the owner of it for
all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to the Company at
its request unless an abandoned property law designates another Person. After
any such payment, Holders entitled to the money must look only to the Company
and not to the Trustee for payment.
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10. Discharge and Defeasance
Subject to certain conditions, the Company at any time shall be entitled to
terminate some or all of its obligations under the Notes and the Indenture if
the Company or a Subsidiary Guarantor deposits with the Trustee money or U.S.
Government Obligations for the payment of principal of (and premium, if any, on)
and interest on the Outstanding Notes to redemption or Stated Maturity, as the
case may be.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
and the Notes may be amended with the written consent of the Holders of at least
a majority in principal amount of the Outstanding Notes and (ii) any default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount of the Outstanding Notes. Subject to
certain exceptions set forth in the Indenture, without the consent of any
Holder, the Company, the Subsidiary Guarantors, if any, and the Trustee shall be
entitled to amend the Indenture to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article VII of the Indenture, or to provide for
uncertificated Notes in addition to or in place of certificated Notes, or to add
or release any Subsidiary Guarantors, or to secure the Notes, or to add
additional covenants or surrender rights and powers conferred on the Company, or
to qualify the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Holder in any material respect.
12. Defaults and Remedies
As set forth in the Indenture, an Event of Default is generally: (a)
failure to pay principal when due upon Stated Maturity, redemption or otherwise;
(b) default for 30 days in payment of interest on any of the Notes; (c) default
in the performance of agreements relating to mergers, consolidations and sales
of all or substantially all assets or to make or consummate a Change of Control
Offer or Net Proceeds Offer; (d) failure for 30 days after notice to comply with
any other covenants in the Indenture or the Notes; (e) certain payment defaults
under, the acceleration prior to the maturity of, and the exercise of certain
enforcement rights with respect to, certain Indebtedness of the Company or any
Restricted Subsidiary in an aggregate principal amount of at least $10,000,000;
(f) cessation, or assertion thereof by the Company or any Subsidiary Guarantor,
of any Subsidiary Guarantee to be fully effective; (g) certain events giving
rise to ERISA liability; (h) certain final judgments against the Company or any
Restricted Subsidiary in an aggregate amount of $10,000,000 or more over the
coverage in applicable insurance policies which remain unsatisfied and either
become subject to commencement or enforcement proceedings or remain unstayed for
a period of 60 days; and (i) certain events of bankruptcy, insolvency or
re-organization of the Company or any Restricted Subsidiary.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding Notes
may declare the principal amount of all the Notes to be due and payable
immediately, except that (i) in the case of an Event of Default arising from
certain events of bankruptcy, insolvency or reorganization of the Company or any
Restricted Subsidiary, the principal amount of the Notes will become due and
payable immediately without further action or notice and (ii) in the case of an
Event of Default which
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relates to certain payment defaults, acceleration or the exercise of certain
enforcement rights with respect to certain Indebtedness, any acceleration of the
Notes will be automatically rescinded if any such Indebtedness is repaid or if
the default relating to such Indebtedness is cured or waived and if the holders
thereof have accelerated such Indebtedness then such holders have rescinded
their declaration of acceleration or if in certain circumstances the proceedings
or enforcement action with respect to the Indebtedness that is the subject of
such Event of Default is terminated or rescinded.
No Holder may pursue any remedy under the Indenture unless the Trustee
shall have failed to act after notice of an Event of Default and written request
by Holders of at least 25% in principal amount of the Outstanding Notes, and the
offer to the Trustee of reasonable indemnity; however, such provision does not
affect the right to xxx for enforcement of any overdue payment on a Note by the
Holder thereof. Subject to certain limitations, Holders of a majority in
principal amount of the Outstanding Notes may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders notice of any
continuing Default (except Default in payment of principal, premium or interest)
if it determines in good faith that withholding the notice is in the interest of
the Holders. The Company is required to file quarterly reports with the Trustee
as to the absence or existence of defaults.
13. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.
14. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company or
any Subsidiary Guarantor shall not have any liability for any obligations of the
Company or any Subsidiary Guarantor under the Notes, any Subsidiary Guarantee or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Holder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
15. Authentication
This Note shall not be valid until an authorized signatory of the Trustee
(or an authenticating agent) manually signs the certificate of authentication on
the other side of this Note.
16. Abbreviations
Customary abbreviations may be used in the name of a Holder or an assignee,
such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT
TEN (=joint tenants with rights of survivorship and not as tenants in common),
CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
I-10
17. CUSIP and ISIN Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP and ISIN numbers
to be printed on the Notes and has directed the Trustee to use CUSIP and ISIN
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
18. Holders' Compliance with Registration Rights Agreement
Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the
provisions of the Registration Rights Agreement, including the obligations of
the Holders with respect to a registration and the indemnification of the
Company to the extent provided therein.
19. Subsidiary Guarantors
Under the circumstances set forth in the Indenture, the Company's payment
obligations under the Notes may be jointly and severally guaranteed by existing
or future Restricted Subsidiaries of the Company as Subsidiary Guarantors.
20. Governing Law
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE ACT IS APPLICABLE.
The Company will furnish to any Holder upon written request and without
charge to the Holder a copy of the Indenture or the Registration Rights
Agreement. Requests may be made to:
XTO Energy Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Investor Relations
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--------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note 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 Note on the
---------------------
books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
---------------- --------------------
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee:
------------------------------------------
Signature must be guaranteed
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
------------------------------------------------------------
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Notes and the last date, if any, on which such Notes were owned by the
Company or any Affiliate of the Company, the undersigned confirms that such
Notes are being transferred in accordance with its terms:
I-12
CHECK ONE BOX BELOW
(1) [ ] in the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) pursuant
to and in compliance with Rule 144A under the Securities Act of
1933;
(2) [ ] outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933;
(3) [ ] pursuant to an exemption from registration provided by Rule 144
under the Securities Act of 1933; or
(4) [ ] pursuant to an effective registration statement under the
Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Notes evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (2) or
(3) is checked, the Trustee shall be entitled to require, prior to
registering any such transfer of the Notes, such legal opinions,
certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, such as the exemption provided by Rule
144 under such Act.
------------------------------------
Signature
TO BE COMPLETED BY PURCHASER IF (1) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated:
------------------ ------------------------------------
NOTICE: To be executed by
an executive officer
I-13
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
Principal amount of
Amount of decrease in Amount of increase in this Global Note Signature of authorized
Date of Principal amount of Principal amount of this following such decrease officer of Trustee or
Exchange this Global Note Global Note or increase) Securities Custodian
-------- --------------------- ------------------------ ----------------------- -----------------------
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 9.15 or 9.16 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 9.15 or 9.16 of the Indenture, state the amount in
principal amount: $
-----------
Date: Your Signature:
---------------- ---------------------------------
(Sign exactly as your name
appears on the other side of
this Note.)
Signature Guarantee:
-------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
X-00
XXXXXXX X-0
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF EXCHANGE NOTE
OR PRIVATE EXCHANGE NOTE]*/**
----------
*/If the Note is to be issued in global form add the Global Notes Legend from
Exhibit 1 to this Appendix and the attachment from such Exhibit 1 captioned "[TO
BE ATTACHED TO GLOBAL NOTES] - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL
NOTES".
**/If the Note is a Private Exchange Note issued in a Private Exchange to an
Initial Purchaser holding an unsold portion of its initial allotment, add the
Restricted Securities Legend from Exhibit 1 to this Appendix and replace the
Assignment Form included in this Exhibit A-1 with the Assignment Form included
in such Exhibit 1.
A-1
No. CUSIP No.
------------ -----------
ISIN No.
-----------
$
----------
6 1/4% Senior Note due 2013
XTO Energy Inc., a Delaware corporation, promises to pay to ,or
-------
registered assigns, the principal sum of Dollars on April 15, 2013.
----------
Interest Payment Dates: April 15 and December 15.
Record Dates: April 1 and December 1.
Additional provisions of this Note are set forth on the other side of
this Note.
IN WITNESS WHEREOF, XTO Energy Inc. has caused this instrument to be
duly executed.
XTO ENERGY INC.
by
------------------------------------
Name:
Title:
Dated:
-------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of
the Notes referred
to in the Indenture.
by
-------------------------------
Authorized Signatory
A-2
[FORM OF REVERSE SIDE OF EXCHANGE NOTE
OR PRIVATE EXCHANGE NOTE]
6 1/4% Senior Note due 2013
1. Interest.
XTO Energy Inc., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Note at the rate per annum shown above[; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
liquidated damages by way of additional interest will accrue on this Note at a
rate of 0.25% per annum (increasing by an additional 0.25% per annum after each
consecutive 90-day period that occurs after the date on which such Registration
Default occurs up to a maximum additional interest rate of 1.50% per annum) from
and including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured.]/1/ The
Company will pay interest semiannually on April 15 and October 15 of each year,
commencing October 15, 2003. Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from April 23, 2003. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment.
The Company will pay interest on the Notes (except defaulted interest)
to the Persons who are registered holders of Notes at the close of business on
the April 1 or October 1 next preceding the Interest Payment Date even if Notes
are canceled after the Regular Record Date and on or before the Interest Payment
Date. Holders must surrender Notes to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. Payments in respect of the Notes represented by a Global Note
(including principal, premium, if any, and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Note (including principal, premium, if any, and interest) by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on a certificated Note held by any Holder owning Notes in
the principal amount of $500,000 or more will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).
----------
/1/ Insert if at the date of issuance of the Exchange Note or Private Exchange
Note (as the case may be) any Registration Default has occurred with respect to
the related Initial Notes during the interest period in which such date of
issuance occurs.
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3. Paying Agent and Registrar.
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice. The Company
or any of its Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture.
The Company issued the Notes under an Indenture dated April 23, 2003
("Indenture"), between the Company and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as
in effect on the date of the Indenture (the "Act"). Terms defined in the
Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. The Notes are subject to all such terms, and Holders are referred to
the Indenture and the Act for a statement of those terms.
The Notes are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 9.14 of the
Indenture, to issue Additional Notes pursuant to Section 2.13 of the Indenture.
The Initial Notes issued on the Issue Date, any Additional Notes and all
Exchange Notes or Private Exchange Notes issued in exchange therefor will be
treated as a single class for all purposes under the Indenture. The Indenture
contains covenants that limit the ability of the Company and its subsidiaries to
incur additional indebtedness; pay dividends or distributions on, or redeem or
repurchase capital stock; make investments; engage in transactions with
affiliates; create liens on assets; transfer or sell assets; guarantee
indebtedness; restrict dividends or other payments of subsidiaries; and
consolidate, merge or transfer all or substantially all of its assets and the
assets of its subsidiaries; and engage in business activities unrelated to its
current activities. If, after the Issue Date, the Notes are assigned an
Investment Grade Rating from both S&P and Xxxxx'x and no Default has occurred
and is continuing, certain covenants will be terminated. These covenants are
subject to important exceptions and qualifications as provided in the Indenture.
5. Optional Redemption and Repurchase.
The Notes are subject to redemption at the option of the Company, in
whole or in part, at any time and from time to time, upon not less than 30 or
more than 60 days' notice, at a Redemption Price of 100% of their principal
amount plus a Make-Whole Amount, together in the case of any such redemption
with accrued and unpaid interest to the Redemption Date (subject to the right of
Holders of record on the relevant Regular Record Date to receive interest due on
an Interest Payment Date that is on or prior to the Redemption Date), all as
provided in the Indenture.
In the case of any redemption of Notes, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Notes, or one or more Predecessor Notes, of record at the close
of business on the relevant Regular Record Date referred to on the face hereof.
Notes (or portions thereof) for whose redemption and
A-4
payment provision is made in accordance with the Indenture shall cease to bear
interest from and after the Redemption Date.
At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase all or any part
specified by the Holder (so long as the principal amount of such part is $1,000
or an integral multiple of $1,000 in excess thereof) of the Notes held by such
Holder on a Business Day selected by the Company no earlier than 30 days nor
later than 70 days after the occurrence of a Change of Control, at a purchase
price equal to 101% of the principal amount thereof together with accrued and
unpaid interest to the Change of Control Purchase Date. The Holder shall have
the right to withdraw any Change of Control Purchase election (in whole or in a
portion thereof that is $1,000 or an integral multiple of $1,000 in excess
thereof) at any time prior to the close of business on the third Business Day
next preceding the Change of Control Purchase Date by delivering a written
notice of withdrawal to the Company in accordance with the terms of the
Indenture.
In the event of redemption or purchase of this Note in part only, a
new Note or Notes for the unredeemed or unpurchased portion hereof shall be
issued in the name of the Holder hereof upon the cancellation hereof.
The Notes do not have the benefit of any sinking fund obligations.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Notes to be redeemed at its
registered address. Notes in denominations larger than $1,000 principal amount
may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the Redemption Price of and accrued interest on all Notes (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent by 11:00 A.M., New York City time, on the Redemption Date and
certain other conditions are satisfied, on and after such date interest ceases
to accrue on such Notes (or such portions thereof) called for redemption.
7. Denominations; Transfer; Exchange.
The Notes are in registered form without coupons in denominations of
$1,000 principal amount and whole multiples of $1,000. A Holder may transfer or
exchange Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer or exchange of any Notes
selected for redemption (except, in the case of a Note to be redeemed in part,
the portion of the Note not to be redeemed) or any Notes for a period of 15 days
before a selection of Notes to be redeemed or 15 days before an interest payment
date.
8. Persons Deemed Owners.
The registered Holder of this Note may be treated as the owner of it
for all purposes.
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9. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee or Paying Agent for payment.
10. Discharge and Defeasance.
Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Notes and the
Indenture if the Company or a Subsidiary Guarantor deposits with the Trustee
money or U.S. Government Obligations for the payment of principal of (and
premium, if any, on) and interest on the Outstanding Notes to redemption or
Stated Maturity, as the case may be.
11. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Notes may be amended with the written consent of the Holders
of at least a majority in principal amount of the Outstanding Notes and (ii) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount of the Outstanding
Notes. Subject to certain exceptions set forth in the Indenture, without the
consent of any Holder, the Company, the Subsidiary Guarantors, if any, and the
Trustee shall be entitled to amend the Indenture to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article VII of the
Indenture, or to provide for uncertificated Notes in addition to or in place of
certificated Notes, or to add or release Subsidiary Guarantors, or to secure the
Notes, or to add additional covenants or surrender rights and powers conferred
on the Company, or to qualify the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Holder in any material respect.
12. Defaults and Remedies
As set forth in the Indenture, an Event of Default is generally: (a)
failure to pay principal when due upon Stated Maturity, redemption or otherwise;
(b) default for 30 days in payment of interest on any of the Notes; (c) default
in the performance of agreements relating to mergers, consolidations and sales
of all or substantially all assets or to make or consummate a Change of Control
Offer or Net Proceeds Offer; (d) failure for 30 days after notice to comply with
any other covenants in the Indenture or the Notes; (e) certain payment defaults
under, the acceleration prior to the maturity of, and the exercise of certain
enforcement rights with respect to, certain Indebtedness of the Company or any
Restricted Subsidiary in an aggregate principal amount of at least $10,000,000;
(f) cessation, or assertion thereof by the Company or any Subsidiary Guarantor,
of any Subsidiary Guarantee to be fully effective; (g) certain events giving
rise to ERISA liability; (h) certain final judgments against the Company or any
Restricted
A-6
Subsidiary in an aggregate amount of $10,000,000 or more over the coverage in
applicable insurance policies which remain unsatisfied and either become subject
to commencement or enforcement proceedings or remain unstayed for a period of 60
days; and (i) certain events of bankruptcy, insolvency or re-organization of the
Company or any Restricted Subsidiary.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding Notes
may declare the principal amount of all the Notes to be due and payable
immediately, except that (i) in the case of an Event of Default arising from
certain events of bankruptcy, insolvency or reorganization of the Company or any
Restricted Subsidiary, the principal amount of the Notes will become due and
payable immediately without further action or notice and (ii) in the case of an
Event of Default which relates to certain payment defaults, acceleration or the
exercise of certain enforcement rights with respect to certain Indebtedness, any
acceleration of the Notes will be automatically rescinded if any such
Indebtedness is repaid or if the default relating to such Indebtedness is cured
or waived and if the holders thereof have accelerated such Indebtedness then
such holders have rescinded their declaration of acceleration or if in certain
circumstances the proceedings or enforcement action with respect to the
Indebtedness that is the subject of such Event of Default is terminated or
rescinded.
No Holder may pursue any remedy under the Indenture unless the Trustee
shall have failed to act after notice of an Event of Default and written request
by Holders of at least 25% in principal amount of the Outstanding Notes, and the
offer to the Trustee of reasonable indemnity; however, such provision does not
affect the right to xxx for enforcement of any overdue payment on a Note by the
Holder thereof. Subject to certain limitations, Holders of a majority in
principal amount of the Outstanding Notes may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders notice of any
continuing Default (except Default in payment of principal, premium or interest)
if it determines in good faith that withholding the notice is in the interest of
the Holders. The Company is required to file quarterly reports with the Trustee
as to the absence or existence of defaults.
13. Trustee Dealings with the Company.
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.
14. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
or any Subsidiary Guarantor or the Trustee shall not have any liability for any
obligations of the Company or any Subsidiary Guarantor under the Notes, any
Subsidiary Guarantee or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Note, each
Holder waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Notes.
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15. Authentication.
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Note.
16. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
17. CUSIP and ISIN Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP and ISIN numbers
to be printed on the Notes and has directed the Trustee to use CUSIP and ISIN
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
[18. Holders' Compliance with Registration Rights Agreement. /2/
Each Holder of a Note, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.]
[19.] Subsidiary Guarantors.
Under the circumstances set forth in the Indenture, the Company's
payment obligations under the Notes may be jointly and severally guaranteed by
existing or future Restricted Subsidiaries of the Company as Subsidiary
Guarantors.
[20.] Governing Law.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE ACT IS APPLICABLE.
----------
/2/ Insert this provision only if the Note is a Private Exchange Note.
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The Company will furnish to any Holder upon written request and
without charge to the Holder a copy of the Indenture [and the Registration
Rights Agreement]/3/. Requests may be made to:
XTO Energy Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Investor Relations
----------
/3/ Insert this provision only if the Note is a Private Exchange Note.
A-9
--------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note 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 Note on the
---------------------
books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
---------------- -------------------------------
----------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee:
-----------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 9.15 or 9.16 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 9.15 or 9.16 of the Indenture, state the amount in
principal amount: $
----------------
Date: Your Signature:
---------------- ---------------------------------
(Sign exactly as your name
appears on the other side of
this Note.)
Signature Guarantee:
-----------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-11
Exhibit B
================================================================================
XTO ENERGY INC.
and
the Guarantors named herein
----------------------------
6 1/4% SENIOR NOTES DUE 2013
----------------------------
----------
FORM OF SUPPLEMENTAL INDENTURE
DATED AS OF ,
-------- --- ----
----------
THE BANK OF NEW YORK,
Trustee
----------
================================================================================
B-1
This SUPPLEMENTAL INDENTURE, dated as of , , is among XTO
---------- --- ----
Energy Inc., a Delaware corporation (the "Company"), each of the parties
identified under the caption "Guarantors" on the signature page hereto (the
"Guarantors") and The Bank of New York, a New York banking corporation, as
Trustee.
RECITALS
WHEREAS, the Company and the Trustee have entered into an Indenture, dated
as of April 23, 2003 (the "Indenture"), pursuant to which the Company has issued
its 6 1/4% Senior Notes due 2013 (the "Notes"); and
WHEREAS, Section 8.2(i) of the Indenture provides that the Company, the
Guarantors and the Trustee may amend or supplement the Indenture in order to add
any new Guarantor to comply with Section 9.12 thereof, without the consent of
the Holders of the Notes; and
WHEREAS, all acts and things prescribed by the Indenture, by law and by the
charter and the bylaws (or comparable constituent documents) of the Company, of
the Guarantors and of the Trustee necessary to make this Supplemental Indenture
a valid instrument legally binding on the Company, the Guarantors and the
Trustee, in accordance with its terms, have been duly done and performed;
NOW, THEREFORE, to comply with the provisions of the Indenture and in
consideration of the above premises, the Company, the Guarantors and the Trustee
covenant and agree for the equal and proportionate benefit of the respective
Holders of the Notes as follows:
ARTICLE 1
Section 1.01. This Supplemental Indenture is supplemental to the Indenture
and does and shall be deemed to form a part of, and shall be construed in
connection with and as part of, the Indenture for any and all purposes.
Section 1.02. This Supplemental Indenture shall become effective
immediately upon its execution and delivery by each of the Company, the
Guarantors and the Trustee.
ARTICLE 2
From this date, in accordance with Section 9.12 and by executing this
Supplemental Indenture, the Guarantors whose signatures appear below are subject
to the provisions of the Indenture to the extent provided for in Article XIV
thereunder. Each of such Guarantors waives, and agrees not in any manner
whatsoever to claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Guarantor
under its Subsidiary Guarantee until such time as the obligations guaranteed
thereby are paid in full.
B-2
ARTICLE 3
Section 3.01. Except as specifically modified herein, the Indenture and the
Notes are in all respects ratified and confirmed (mutatis mutandis) and shall
remain in full force and effect in accordance with their terms with all
capitalized terms used herein without definition having the same respective
meanings ascribed to them as in the Indenture.
Section 3.02. Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed, by the Trustee by reason of this Supplemental Indenture. The recitals
contained herein are made by the Company and the Guarantors and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
Supplemental Indenture. This Supplemental Indenture is executed and accepted by
the Trustee subject to all the terms and conditions set forth in the Indenture
with the same force and effect as if those terms and conditions were repeated at
length herein and made applicable to the Trustee with respect hereto.
Section 3.03. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE AND ENFORCE THIS SUPPLEMENTAL INDENTURE.
Section 3.04. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of such
executed copies together shall represent the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
XTO Energy Inc.
By
--------------------------------
Name:
Title:
[Guarantors]
By
--------------------------------
Name:
Title:
The Bank of New York, as Trustee
By
--------------------------------
Name:
Title:
B-3
