MAGNUM HUNTER RESOURCES, INC.,
as Issuer
and
THE SUBSIDIARY GUARANTORS named herein
and
Bankers Trust Company,
as Trustee
-------------------------
INDENTURE
Dated as of March 15, 2002
----------------------
9.60 % Senior Notes due 2012, Series A
9.60 % Senior Notes due 2012, Series B
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- ---------
310 (a)(1)........................................... 7.10
(a)(2)........................................... 7.10
(a)(3)........................................... N.A.
(a)(4)........................................... N.A.
(a)(5)........................................... 7.08; 7.10
(b).............................................. 7.03; 7.08; 7.10; 11.02
(c).............................................. N.A.
311 (a).............................................. 7.11
(b).............................................. 7.11
(c).............................................. N.A.
312 (a).............................................. 2.05
(b).............................................. 11.03
(c).............................................. 11.03
313 (a).............................................. 7.06
(b)(1)........................................... N.A.
(b)(2)........................................... 7.06
(c).............................................. 7.06; 11.02
(d).............................................. 7.06
314 (a).............................................. 4.06; 4.08
(b).............................................. N.A.
(c)(1)........................................... 11.04
(c)(2)........................................... 11.04
(c)(3)........................................... N.A.
(d).............................................. N.A.
(e).............................................. 11.05
(f).............................................. N.A.
315 (a).............................................. 7.01(b)
(b).............................................. 7.05
(c).............................................. 7.01(a)
(d).............................................. 7.01(c)
(e).............................................. 6.11
316 (a)(last sentence)............................... 2.09
(a)(1)(A)........................................ 6.05
(a)(1)(B)........................................ 6.04
(a)(2)........................................... N.A.
(b).............................................. 6.07
(c).............................................. 9.04
317 (a)(1)........................................... 6.08
(a)(2)........................................... 6.09
(b).............................................. 2.04
318 (a).............................................. 11.01
(b).............................................. N.A.
(c).............................................. 11.01
----------------------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to
be a part of the Indenture.
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TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions...........................................................................1
SECTION 1.02. Incorporation by Reference of TIA....................................................26
SECTION 1.03. Rules of Construction................................................................26
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating......................................................................27
SECTION 2.02. Execution and Authentication; Aggregate Principal Amount.............................28
SECTION 2.03. Registrar and Paying Agent...........................................................29
SECTION 2.04. Paying Agent To Hold Assets in Trust.................................................29
SECTION 2.05. Holder Lists.........................................................................30
SECTION 2.06. Transfer and Exchange................................................................30
SECTION 2.07. Replacement Notes....................................................................30
SECTION 2.08. Outstanding Notes....................................................................31
SECTION 2.09. Treasury Notes.......................................................................31
SECTION 2.10. Temporary Notes......................................................................31
SECTION 2.11. Cancellation.........................................................................32
SECTION 2.12. Defaulted Interest...................................................................32
SECTION 2.13. CUSIP Number.........................................................................33
SECTION 2.14. Deposit of Monies....................................................................33
SECTION 2.15. Restrictive Legends..................................................................33
SECTION 2.16. Book-Entry Provisions for Global Security............................................35
SECTION 2.17. Special Transfer Provisions..........................................................36
SECTION 2.18. Additional Interest Under Registration Rights Agreement..............................39
SECTION 2.19. Designation..........................................................................39
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee...................................................................39
SECTION 3.02. Selection of Notes To Be Redeemed....................................................39
SECTION 3.03. Optional Redemption..................................................................40
SECTION 3.04. Notice of Redemption.................................................................40
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SECTION 3.05. Effect of Notice of Redemption.......................................................41
SECTION 3.06. Deposit of Redemption Price..........................................................41
SECTION 3.07. Notes Redeemed in Part...............................................................42
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.....................................................................42
SECTION 4.02. Maintenance of Office or Agency......................................................42
SECTION 4.03. Corporate Existence..................................................................43
SECTION 4.04. Payment of Taxes and Other Claims....................................................43
SECTION 4.05. Maintenance of Properties and Insurance..............................................43
SECTION 4.06. Compliance Certificate; Notice of Default............................................44
SECTION 4.07. Compliance with Laws.................................................................44
SECTION 4.08. Reports to Holders...................................................................45
SECTION 4.09. Waiver of Stay, Extension or Usury Laws..............................................45
SECTION 4.10. Limitation on Restricted Payments....................................................45
SECTION 4.11. Limitations on Transactions with Affiliates..........................................48
SECTION 4.12. Limitation on Incurrence of Additional Indebtedness..................................48
SECTION 4.13. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries....................................................49
SECTION 4.14. Limitation on Restricted and Unrestricted Subsidiaries...............................50
SECTION 4.15. Change of Control....................................................................52
SECTION 4.16. Limitation on Asset Sales............................................................54
SECTION 4.17. Limitation on Preferred Stock of Restricted Subsidiaries.............................57
SECTION 4.18. Limitation on Liens..................................................................57
SECTION 4.19. Limitation on Conduct of Business....................................................57
SECTION 4.20. Additional Subsidiary Guarantees.....................................................58
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets.............................................58
SECTION 5.02. Successor Corporation Substituted....................................................60
ARTICLE SIX
REMEDIES
SECTION 6.01. Events of Default....................................................................60
SECTION 6.02. Acceleration.........................................................................62
SECTION 6.03. Other Remedies.......................................................................63
SECTION 6.04. Waiver of Past Defaults..............................................................63
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SECTION 6.05. Control by Majority..................................................................63
SECTION 6.06. Limitation on Suits..................................................................63
SECTION 6.07. Right of Holders To Receive Payment..................................................64
SECTION 6.08. Collection Suit by Trustee...........................................................64
SECTION 6.09. Trustee May File Proofs of Claim.....................................................64
SECTION 6.10. Priorities...........................................................................65
SECTION 6.11. Undertaking for Costs................................................................65
SECTION 6.12. Restoration of Rights and Remedies...................................................65
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee....................................................................66
SECTION 7.02. Rights of Trustee....................................................................67
SECTION 7.03. Individual Rights of Trustee.........................................................68
SECTION 7.04. Trustee's Disclaimer.................................................................68
SECTION 7.05. Notice of Default....................................................................68
SECTION 7.06. Reports by Trustee to Holders........................................................68
SECTION 7.07. Compensation and Indemnity...........................................................69
SECTION 7.08. Replacement of Trustee...............................................................70
SECTION 7.09. Successor Trustee by Merger, Etc.....................................................70
SECTION 7.10. Eligibility; Disqualification........................................................71
SECTION 7.11. Preferential Collection of Claims Against the Company................................71
SECTION 7.12. Force Majeure........................................................................71
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations.................................................71
SECTION 8.02. Application of Trust Money...........................................................73
SECTION 8.03. Repayment to the Company.............................................................74
SECTION 8.04. Reinstatement........................................................................74
SECTION 8.05. Acknowledgment of Discharge by Trustee...............................................74
ARTICLE NINE
MODIFICATION OF THE INDENTURE
SECTION 9.01. Without Consent of Holders...........................................................75
SECTION 9.02. With Consent of Holders..............................................................75
SECTION 9.03. Compliance with Trust Indenture Act..................................................76
SECTION 9.04. Revocation and Effect of Consents....................................................76
SECTION 9.05. Notation on or Exchange of Notes.....................................................76
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SECTION 9.06. Trustee To Sign Amendments, Etc......................................................77
ARTICLE TEN
[INTENTIONALLY OMITTED]
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls.........................................................................77
SECTION 11.02. Notices..............................................................................77
SECTION 11.03. Communications by Holders with Other Holders.........................................78
SECTION 11.04. Certificate and Opinion as to Conditions Precedent...................................79
SECTION 11.05. Statements Required in Certificate or Opinion........................................79
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar............................................79
SECTION 11.07. Legal Holidays.......................................................................79
SECTION 11.08. Governing Law........................................................................80
SECTION 11.09. No Adverse Interpretation of Other Agreements........................................80
SECTION 11.10. No Personal Liability................................................................80
SECTION 11.11. Successors...........................................................................80
SECTION 11.12. Duplicate Originals..................................................................80
SECTION 11.13. Severability.........................................................................80
SECTION 11.14. Independence of Covenants............................................................81
ARTICLE TWELVE
GUARANTEE OF NOTES
SECTION 12.01. Unconditional Guarantee..............................................................81
SECTION 12.02. Limitations on Guarantees............................................................82
SECTION 12.03. Execution and Delivery of Guarantee..................................................82
SECTION 12.04. Release of a Subsidiary Guarantor....................................................83
SECTION 12.05. Waiver of Subrogation................................................................84
SECTION 12.06. Immediate Payment....................................................................84
SECTION 12.07. No Set-Off...........................................................................84
SECTION 12.08. Obligations Absolute.................................................................84
SECTION 12.09. Obligations Continuing...............................................................85
SECTION 12.10. Obligations Not Reduced..............................................................85
SECTION 12.11. Obligations Reinstated...............................................................85
SECTION 12.12. Obligations Not Affected.............................................................85
SECTION 12.13. Waiver...............................................................................87
SECTION 12.14. No Obligation To Take Action Against the Company.....................................87
SECTION 12.15. Dealing with the Company and Others..................................................87
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SECTION 12.16. Default and Enforcement..............................................................88
SECTION 12.17. Amendment, Etc.......................................................................88
SECTION 12.18. Acknowledgment.......................................................................88
SECTION 12.19. Costs and Expenses...................................................................88
SECTION 12.20. No Merger or Waiver; Cumulative Remedies.............................................88
SECTION 12.21. Survival of Obligations..............................................................88
SECTION 12.22. Guarantee in Addition to Other Obligations...........................................89
SECTION 12.23. Severability.........................................................................89
SECTION 12.24. Successors and Assigns...............................................................89
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INDENTURE, dated as of March 15, 2002, among Magnum Hunter Resources, Inc.,
a Nevada corporation (the "Company"), the Subsidiary Guarantors and Bankers
Trust Company, as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 9.60 % Senior
Notes due 2012, Series A (the "Initial Notes") and 9.60 % Senior Notes due 2012,
Series B to be issued in exchange for the Initial Notes pursuant to the
Registration Rights Agreement (as defined herein) (the "Exchange Notes" and,
together with the Initial Notes, the "Notes") and, to provide therefor, the
Company has duly authorized the execution and delivery of this Indenture. The
Notes will be guaranteed on a senior basis by each of the Subsidiary Guarantors.
All things necessary to make the Notes, when duly issued and executed by the
Company, and authenticated and delivered hereunder, the valid obligations of the
Company, and to make this Indenture a valid and binding agreement of the
Company, have been done.
Each party hereto agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of the Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
-----------
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries (1) existing at the time such Person becomes a Restricted
Subsidiary or at the time it merges or consolidates with the Company or any of
its Restricted Subsidiaries or (2) which becomes Indebtedness of the Company or
a Restricted Subsidiary in connection with the acquisition of assets from such
Person, in each case not incurred in connection with, or in anticipation or
contemplation of, such Person becoming a Restricted Subsidiary or such
acquisition, merger or consolidation.
"Additional Interest" shall have the meaning set forth in the Registration
Rights Agreement.
"Additional Notes" means Notes, in addition to, and having identical terms
as, the $300,000,000 aggregate principal amount of Series A Notes issued on the
Issue Date (or the Series B Notes issued in exchange for the Series A Notes
issued on the Issue Date), issued pursuant to Article II and in compliance with
Section 4.12.
"Adjusted Consolidated Net Tangible Assets" means (without duplication), as
of the date of determination:
(1) the sum of:
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(a) discounted future net revenues from proved oil and gas reserves of the
Company and its consolidated Subsidiaries, calculated in accordance with
Commission guidelines (before any state or federal income tax), as estimated by
a nationally recognized firm of independent petroleum engineers as of a date no
earlier than the date of the Company's latest annual consolidated financial
statements, as increased by, as of the date of determination, the estimated
discounted future net revenues from:
(i) estimated proved oil and gas reserves acquired since the date of such
year-end reserve report; and
(ii) 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 of cases (i) and (ii) calculated in accordance with Commission
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:
(iii) estimated proved oil and gas reserves produced or disposed of since
the date of such year-end reserve report, and
(iv) 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 of cases (iii) and (iv) calculated in accordance with Commission
guidelines (utilizing the prices utilized in such year-end reserve report);
provided, however, that, in the case of each of the determinations made pursuant
to clauses (i) through (iv), such increases and decreases shall be as estimated
by the Company's petroleum engineers, unless in the event that there is a
Material Change as a result of such acquisitions, dispositions or revisions,
then the discounted future net revenues utilized for purposes of this clause
(1)(a) shall be confirmed in writing, by a nationally recognized firm of
independent petroleum engineers (which may be the Company's independent
petroleum engineers who prepare the Company's annual reserve report); plus
(b) the capitalized costs that are attributable to oil and gas properties
of the Company and its Subsidiaries to which no proved oil and gas reserves are
attributable, based on the Company's books and records as of a date no earlier
than the date of the Company's latest annual or quarterly financial statements;
plus
(c) the Net Working Capital on a date no earlier than the date of the
Company's latest consolidated annual or quarterly financial statements; plus
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(d) with respect to each other tangible asset of the Company or its
consolidated Restricted Subsidiaries, specifically including, but not to the
exclusion of any other qualifying tangible assets, the Company's or its
consolidated Restricted Subsidiaries, gas gathering and processing facilities
and unproved oil and gas properties (less any remaining deferred income taxes
which have been allocated to such gas processing facilities in connection with
the acquisition thereof), land, equipment, leasehold improvements, investments
carried on the equity method, restricted cash and the carrying value of
marketable securities, the greater of (i) the net book value of such other
tangible asset on a date no earlier than the date of the Company's latest
consolidated annual or quarterly financial statements or (ii) the appraised
value, as estimated by a qualified Independent Advisor, of such other tangible
assets of the Company and its Restricted Subsidiaries, as of a date no earlier
than the date of the Company's latest audited financial statements; minus
(2) minority interests and, to the extent not otherwise taken into account
in determining Adjusted Consolidated Net Tangible Assets, any gas balancing
liabilities of the Company and its consolidated Restricted Subsidiaries
reflected in the Company's latest audited financial statements. In addition to,
but without duplication of, the foregoing, for purposes of this definition,
"Adjusted Consolidated Net Tangible Assets" shall be calculated after giving
effect, on a pro forma basis, to (A) any Investment not prohibited by this
Indenture, to and including the date of the transaction giving rise to the need
to calculate Adjusted Consolidated Net Tangible Assets (the "Assets Transaction
Date"), in any other Person that, as a result of such Investment, becomes a
Restricted Subsidiary of the Company, (B) the acquisition, to and including the
Assets Transaction Date (by merger, consolidation or purchase of stock or
assets), of any business or assets, including, without limitation, Permitted
Industry Investments, and (C) any sales or other dispositions of assets
permitted by this Indenture (other than sales of Hydrocarbons or other mineral
products in the ordinary course of business) occurring on or prior to the Assets
Transaction Date.
"Affiliate" means, with respect to any specified Person, (a) any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or under common control with, such specified Person and (b)
any Related Person of such Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative of the foregoing.
"Affiliate Transaction" has the meaning provided in Section 4.11.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Agent Members" has the meaning provided in Section 2.16.
"Asset Acquisition" means (1) an Investment by the Company or any
Restricted Subsidiary in any other Person pursuant to which such Person shall
become a Restricted Subsidiary, or shall be merged with or into the Company or
any Restricted Subsidiary, or (2) the acquisition by the Company or any
Restricted Subsidiary of the assets of any Person (other than a Restricted
Subsidiary)
-4-
which constitute all or substantially all of the assets of such Person or
comprises any division or line of business of such Person.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, exchange, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Company or any of its Restricted Subsidiaries (including any Sale and Leaseback
Transaction) to any Person other than the Company or a Restricted Subsidiary of:
(1) any Capital Stock of any Restricted Subsidiary; or
(2) any other property or assets (including any interests therein) of the
Company or any Restricted Subsidiary, including any disposition by means of a
merger, consolidation or similar transaction;
provided, however, that Asset Sales shall not include:
(a) the sale, lease, conveyance, disposition or other transfer of all or
substantially all of the assets of the Company in a transaction which is made in
compliance with the provisions of Section 5.01;
(b) any Investment in an Unrestricted Subsidiary which is made in
compliance with the provisions of Section 4.10;
(c) disposals or replacements of obsolete equipment in the ordinary course
of business;
(d) the sale, lease, conveyance, disposition or other transfer (each, a
"Transfer") by the Company or any Restricted Subsidiary of assets or property to
the Company or one or more Restricted Subsidiaries;
(e) any disposition of Hydrocarbons or other mineral products for value in
the ordinary course of business;
(f) any Transfer of an interest in an oil, gas or mineral property pursuant
to a farm-out, farm-in, joint operation, area of mutual interest agreement or
other similar or customary arrangement or agreement that the Company or any
Restricted Subsidiary determines in good faith to be necessary for the economic
development of such Property; and
(g) the Transfer by the Company or any Restricted Subsidiary of assets or
property in the ordinary course of business; provided, however, that the
aggregate amount (valued at the fair market value of such assets or property at
the time of such Transfer) of all such assets and property Transferred pursuant
to this clause (g) shall not exceed $5.0 million in any fiscal year of the
Company.
"Authenticating Agent" has the meaning provided in Section 2.02.
-5-
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal, state or
foreign law for the relief of debtors.
"Board of Directors" means, as for any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions in the City of New York are required or authorized
by law or other governmental action to be closed.
"Capital Stock" means:
(1) with respect to any Person that is a corporation, any and all shares,
interests, participations or other equivalents (however designated and whether
or not voting) of corporate stock, including each class of Common Stock and
Preferred Stock of such Person and including any warrants, options or rights to
acquire any of the forgoing and instruments convertible into any of the
foregoing; and
(2) with respect to any Person that is not a corporation, any and all
partnership or other equity interests of such Person. "Capitalized Lease
Obligation" means, as to any Person, the discounted present value of the rental
obligations of such Person 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 at such date,
determined in accordance with GAAP.
"Cash Equivalents" means:
(1) marketable direct obligations issued by, or unconditionally guaranteed
by, the United States Government or issued by any agency thereof and backed by
the full faith and credit of the United States, in each case maturing within one
year from the date of acquisition thereof;
(2) marketable direct obligations issued by any state of the United States
of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from S&P or Moody's;
(3) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody's;
-6-
(4) certificates of deposit or bankers' acceptances maturing within one
year from the date of acquisition thereof issued by any bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia or any United States branch of a foreign bank having at the date of
acquisition thereof combined capital and surplus of not less than $250.0
million;
(5) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (1) above entered into
with any bank meeting the qualifications specified in clause (4) above; and
(6) money market mutual or similar funds having assets in excess of $100.0
million.
"Change of Control" means the occurrence of one or more of the following
events: (a) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company to any Person (a "Transferee") or group of related Persons for purposes
of Section 13(d) of the Exchange Act (a "Group") (whether or not otherwise in
compliance with the provisions of this Indenture), but excluding any such sale,
lease, exchange or other transfer as part of a transaction in compliance with
Section 5.01 if the holders of the Company's Capital Stock immediately prior to
such transaction own at least a majority (by voting power) of the Capital Stock
of such Transferee immediately after such transaction; (b) the approval by the
holders of Capital Stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company (whether or not otherwise in
compliance with the provisions of this Indenture); (c) any Person or Group shall
become the owner, directly or indirectly, beneficially or of record, of shares
representing more than 50% of the aggregate ordinary voting power represented by
the issued and outstanding Capital Stock of the Company; or (d) the replacement
of a majority of the Board of Directors of the Company over a two-year period
from the directors who constituted the Board of Directors of the Company at the
beginning of such period with directors whose replacement shall not have been
approved (by recommendation, nomination or election, as the case may be) by a
vote of at least a majority of the Board of Directors of the Company then still
in office who either were members of such Board of Directors at the beginning of
such period or whose election as a member of such Board of Directors was
previously so approved.
"Change of Control Offer" has the meaning provided in Section 4.15.
"Change of Control Payment Date" has the meaning provided in Section 4.15.
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated and whether voting
or non-voting) of such Person's common stock, whether outstanding on the Issue
Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company Properties" means all Properties, and equity, partnership or other
ownership interests therein, that are related or incidental to, or used or
useful in connection with, the
-7-
conduct or operation of any business activities of the Company or the
Subsidiaries, which business activities are not prohibited by the terms of this
Indenture.
"Consolidated EBITDA" means, for any period, the sum (without duplication)
of:
(1) Consolidated Net Income; and
(2) to the extent Consolidated Net Income has been reduced thereby:
(a) all income taxes of the Company and its Restricted Subsidiaries paid or
accrued in accordance with GAAP for such period (other than income taxes
attributable to extraordinary, unusual or nonrecurring gains or losses or taxes
attributable to sales or dispositions outside the ordinary course of business);
(b) Consolidated Interest Expense;
(c) the amount of any Preferred Stock dividends paid by the Company and its
Restricted Subsidiaries; and
(d) Consolidated Non-cash Charges, less any non-cash items increasing
Consolidated Net Income for such period, all as determined on a consolidated
basis for the Company and its Restricted Subsidiaries in accordance with GAAP.
"Consolidated EBITDA Coverage Ratio" means, with respect to the Company,
the ratio of Consolidated EBITDA of the Company during the four full fiscal
quarters for which financial information in respect thereof is available (the
"Four Quarter Period") ending on or prior to the date of the transaction giving
rise to the need to calculate the Consolidated EBITDA Coverage Ratio (the
"Transaction Date") to Consolidated Fixed Charges of the Company for the Four
Quarter Period. In addition to and without limitation of the foregoing, for
purposes of this definition, "Consolidated EBITDA" and "Consolidated Fixed
Charges" shall be calculated after giving effect (without duplication) on a pro
forma basis for the period of such calculation to:
(1) the incurrence or repayment of any Indebtedness of the Company or any
of its Restricted Subsidiaries (and the application of the proceeds thereof)
giving rise to the need to make such calculation and any incurrence or repayment
of other Indebtedness (and the application of the proceeds thereof), other than
the incurrence or repayment of indebtedness in the ordinary course of business
for working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period; and
(2) any Asset Sales or Asset Acquisitions (including, without limitation,
any Asset Acquisition giving rise to the need to make such calculation as a
result of the Company or one of its Restricted Subsidiaries (including any
Person who becomes a Restricted Subsidiary as a result of the Asset Acquisition)
incurring, assuming or otherwise being liable
-8-
for Acquired Indebtedness, and also including, without limitation, any
Consolidated EBITDA attributable to the assets which are the subject of the
Asset Acquisition or Asset Sale during the Four Quarter Period) occurring during
the Four Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or
Asset Acquisition (including the incurrence, assumption or liability for any
such Acquired Indebtedness) occurred on the first day of the Four Quarter
Period.
If the Company or any of its Restricted Subsidiaries directly or indirectly
guarantees Indebtedness of a third Person, the preceding sentence shall give
effect to the incurrence of such guaranteed Indebtedness as if the Company or
the Restricted Subsidiary, as the case may be, had directly incurred or
otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated EBITDA
Coverage Ratio:"
(1) interest on outstanding Indebtedness determined on a fluctuating basis
as of the Transaction Date and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per annum equal to
the rate of interest on such Indebtedness in effect on the Transaction Date;
(2) if interest on any Indebtedness actually incurred on the Transaction
Date may optionally be determined at an interest rate based upon a factor of a
prime or similar rate, a eurocurrency interbank offered rate, or other rates,
then the interest rate in effect on the Transaction Date will be deemed to have
been in effect during the Four Quarter Period;
(3) notwithstanding clauses (1) and (2) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by
agreements relating to Interest Swap Obligations, shall be deemed to accrue at
the rate per annum resulting after giving effect to the operation of such
agreements.
"Consolidated Fixed Charges" means, with respect to the Company for any
period, the sum, without duplication, of:
(1) Consolidated Interest Expense (including any premium or penalty paid in
connection with redeeming or retiring Indebtedness of the Company and its
Restricted Subsidiaries prior to the stated maturity thereof pursuant to the
agreements governing such Indebtedness); plus
(2) the product of (x) the amount of all dividend payments on any series of
Preferred Stock of the Company (other than dividends paid in Qualified Capital
Stock) paid, accrued or scheduled to be paid or accrued during such period times
(y) a fraction, the numerator of which is one and the denominator of which is
one minus the then current effective consolidated federal, state and local
income tax rate of the Company, expressed as a decimal.
-9-
"Consolidated Interest Expense" means, with respect to the Company for any
period, the sum of, without duplication:
(1) the aggregate of the interest expense of the Company and its Restricted
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP, including without limitation, (a) any amortization of original issue
discount, (b) the net costs, losses or gains under Interest Swap Obligations,
(c) all capitalized interest and (d) the interest portion of any deferred
payment obligation; and
(2) 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.
"Consolidated Net Income" means, with respect to the Company for any
period, the aggregate net income (or loss) of the Company and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided, however, that there shall be excluded therefrom:
(1) after-tax gains from Asset Sales or abandonments or reserves relating
thereto;
(2) after-tax items classified as extraordinary or nonrecurring gains;
(3) the net income of any Person acquired in a "pooling of interests"
transaction accrued prior to the date it becomes a Restricted Subsidiary or is
merged or consolidated with the Company or any Restricted Subsidiary;
(4) the net income (but not loss) of any Restricted Subsidiary to the
extent that the declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is restricted by charter, contract,
operation of law or otherwise;
(5) the net income of any Person in which the Company has an interest,
other than a Restricted Subsidiary, except to the extent of cash dividends or
distributions actually paid to the Company or to a Restricted Subsidiary by such
Person;
(6) income or loss attributable to discontinued operations (including,
without limitation, operations disposed of during such period whether or not
such operations were classified as discontinued);
(7) in the case of a successor to the Company by consolidation or merger or
as a transferee of the Company's assets, any net income (or loss) of the
successor corporation prior to such consolidation, merger or transfer of assets;
and
(8) any non-cash charges related to a ceiling test writedown under GAAP.
"Consolidated Non-Cash Charges" means, with respect to the Company, for any
period, the aggregate depreciation, depletion, amortization and other non-cash
expenses of the Company
-10-
and its Restricted Subsidiaries reducing Consolidated Net Income of the
Company for such period, determined on a consolidated basis in accordance with
GAAP (excluding any such charges constituting an extraordinary item or loss or
any such charge which requires an accrual of or a reserve for cash charges for
any future period).
"consolidation" means, with respect to any Person, the consolidation of the
accounts of the Restricted Subsidiaries of such Person with those of such
Person, all in accordance with GAAP; provided, however, that "consolidation"
will not include consolidation of the accounts of any Unrestricted Subsidiary of
such Person with the accounts of such Person. The term "consolidated" has a
correlative meaning to the foregoing.
"Corporate Trust Office" means the office of the Trustee at which any
particular time its corporate trust business shall be principally administered,
which office at the date of execution of this Indenture is located at Four
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust and Agency
Services or at any other time at such other address as the Trustee may designate
from time to time by notice to the Holders and the Company.
"Covenant Defeasance" has the meaning set forth in Section 8.01.
"Crude Oil and Natural Gas Business" means:
(1) the acquisition, exploration, development, operation and disposition of
interests in oil, gas and other Hydrocarbon properties;
(2) the gathering, marketing, treating, processing, storage, selling and
transporting of any production from such interests or properties of the Company
or of others; and
(3) activities incidental to the foregoing.
"Crude Oil and Natural Gas Hedge Agreements" means, with respect to any
Person, any oil and gas agreements and other agreements or arrangements or any
combination thereof entered into by such Person in the ordinary course of
business and that are designed to manage the risks of oil and natural gas price
fluctuations.
"Crude Oil and Natural Gas Properties" means all Properties, including
equity or other ownership interests therein, owned by any Person to which
"proved oil and gas reserves" as defined in Rule 4-10 of Regulation S-X of the
Securities Act have been attributed.
"Crude Oil and Natural Gas Related Assets" means any Investment or capital
expenditure (but not including additions to working capital or repayments of any
revolving credit or working capital borrowings) by the Company or any Subsidiary
of the Company which is related to the business of the Company and its
Subsidiaries as it is conducted on the date of the Asset Sale giving rise to the
Net Cash Proceeds to be reinvested.
-11-
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees and
successors.
"Disqualified Capital Stock" means that portion of any Capital Stock which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is mandatorily redeemable at the sole option of the holder thereof, in whole or
in part, in either case, on or prior to the final maturity of the Notes.
"Equity Offering" means an offering of Qualified Capital Stock of the
Company.
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
"Exchange Notes" has the meaning provided in the preamble to this
Indenture.
"fair market value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between an informed and willing seller and an informed and willing buyer,
neither of whom is under undue pressure or compulsion to complete the
transaction. Fair market value shall be determined by the Board of Directors of
the Company (or for transactions of $5.0 million or less, an officer of the
Company or a Restricted Subsidiary) acting reasonably and in good faith and, if
determined by the Board of Directors of the Company, shall be evidenced by a
Board Resolution of the Company delivered to the Trustee; provided, however,
that if the aggregate non-cash consideration to be received by the Company or
any Restricted Subsidiary from any Asset Sale shall reasonably be expected to
exceed $15.0 million or if the net worth of any Restricted Subsidiary to be
designated as an Unrestricted Subsidiary shall reasonably be expected to exceed
$15.0 million, then fair market value shall be determined by an Independent
Advisor.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board as of any date of determination.
"Global Note" has the meaning provided in Section 2.01.
-12-
"guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such other Person (whether arising by virtue
of partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part) (but if in part, only to the extent thereof); provided,
however, that the term "guarantee" shall not include (A) endorsements for
collection or deposit in the ordinary course of business and (B) guarantees
(other than guarantees of Indebtedness) by the Company in respect of assisting
one or more Subsidiaries in the ordinary course of their respective businesses,
including without limitation guarantees of trade obligations and operating
leases, on ordinary business terms. The term "guarantee" used as a verb has a
corresponding meaning.
"Guarantee" means the guarantee of the obligations under this Indenture and
the Notes by each of the Subsidiary Guarantors as set forth in Article Twelve
hereof.
"Holder" means any Person holding a Note.
"Hydrocarbons" means oil, gas, casinghead gas, drip gasoline, natural
gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and
all constituents, elements or compounds thereof and products processed
therefrom.
"incur" has the meaning set forth in Section 4.12.
"Indebtedness" means with respect to any Person, without duplication:
(1) all obligations of such Person for borrowed money;
(2) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(3) all Capitalized Lease Obligations of such Person;
(4) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations and all obligations
under any title retention agreement (but excluding trade accounts payable);
(5) all obligations for the reimbursement of any obligor on a letter of
credit, banker's acceptance or similar credit transaction;
(6) guarantees and other contingent obligations in respect of Indebtedness
referred to in clauses (1) through (5) above and clause (8) below;
-13-
(7) all obligations of any other Person of the type referred to in clauses
(1) through (6) above which are secured by any Lien on any property or asset of
such Person, the amount of such obligation being deemed to be the lesser of the
fair market value of such property or asset or the amount of the obligation so
secured;
(8) all Obligations under Crude Oil and Natural Gas Hedge Agreements,
Currency Agreements, and Interest Swap Obligations; and
(9) all Disqualified Capital Stock issued by such Person with the amount of
Indebtedness represented by such Disqualified Capital Stock being equal to the
greater of its voluntary or involuntary liquidation preference and its maximum
fixed Redemption Price or repurchase price.
For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified 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 Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the Company.
The "amount" or "principal amount" of Indebtedness at any time of
determination as used herein shall, except as set forth below, be determined in
accordance with GAAP:
(1) any Indebtedness issued at a price that is less than the principal
amount at maturity thereof shall be the face amount of the liability in respect
thereof;
(2) any Capitalized Lease Obligation shall be the amount determined in
accordance with the definition thereof;
(3) any Interest Swap Obligations included in the definition of Permitted
Indebtedness shall be zero;
(4) all other unconditional obligations shall be the amount of the
liability thereof determined in accordance with GAAP; and
(5) all other contingent obligations shall be the maximum liability at such
date of such Person.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Independent Advisor" means a reputable accounting, appraisal or nationally
recognized investment banking, engineering or consulting firm (a) which does
not, and whose directors, officers and employees or Affiliates do not, have a
direct or indirect material financial interest in the
-14-
Company and (b) which, in the judgment of the Board of Directors of the
Company, is otherwise disinterested, independent and qualified to perform the
task for which it is to be engaged.
"Initial Notes" has the meaning provided in the preamble to this Indenture.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"interest" when used with respect to any Note means the amount of all
interest accruing on such Note, including any applicable defaulted interest
pursuant to Section 2.12 and any Additional Interest pursuant to the
Registration Rights Agreement.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Notes.
"Interest Swap 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
shall include, without limitation, interest rate swaps, caps, floors, collars
and similar agreements.
"Investment" means, with respect to any Person, any direct or indirect:
(1) loan, advance or other extension of credit (including, without
limitation, a guarantee) or capital contribution to (by means of any transfer of
cash or other property (valued at the fair market value thereof as of the date
of transfer) others or any payment for property or services for the account or
use of others);
(2) purchase or acquisition by such Person of any Capital Stock, bonds,
notes, debentures or other securities or evidences of Indebtedness issued by,
any Person (whether by merger, consolidation, amalgamation or otherwise and
whether or not purchased directly from the issuer of such securities or
evidences of Indebtedness);
(3) guarantee or assumption of the Indebtedness of any other Person (other
than the guarantee or assumption of Indebtedness of such Person or a Restricted
Subsidiary of such Person which guarantee or assumption is made in compliance
with the provisions of Section 4.12); and
(4) other items that would be classified as investments on a balance sheet
of such Person prepared in accordance with GAAP.
Notwithstanding the foregoing, "Investment" shall exclude extensions of
trade credit by the Company and its Restricted Subsidiaries on commercially
reasonable terms in accordance with normal trade practices of the Company or
such Restricted Subsidiary, as the case may be. The amount of any Investment
shall not be adjusted for increases or decreases in value, or write-ups,
-15-
write-downs or write-offs with respect to such Investment. If the Company
or any Restricted Subsidiary sells or otherwise disposes of any Capital Stock of
any Restricted Subsidiary such that, after giving effect to any such sale or
disposition, it ceases to be a Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Capital Stock of such Restricted
Subsidiary not sold or disposed of.
"Issue Date" means March 15, 2002, the date of original issuance of the
Notes.
"Legal Defeasance" has the meaning set forth in Section 8.01.
"Legal Holiday" has the meaning provided in Section 11.07.
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest).
"Material Change" means an increase or decrease of more than 10% during a
fiscal quarter in the discounted future net cash flows (excluding changes that
result solely from changes in prices) from proved oil and gas reserves of the
Company and consolidated Subsidiaries (before any state or federal income tax);
provided, however, that the following will be excluded from the Material Change
calculation:
(1) any acquisitions during the quarter of oil and gas reserves that have
been estimated by independent petroleum engineers and on which a report or
reports exist;
(2) any disposition of properties existing at the beginning of such quarter
that have been disposed of as provided in Section 4.16; and
(3) any reserves added during the quarter attributable to the drilling or
recompletion of xxxxx not included in previous reserve estimates, but which will
be included in future quarters.
"Maturity Date" means March 15, 2012.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds 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
received by the Company or any of its Restricted Subsidiaries from such Asset
Sale net of (a) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions), (b) taxes paid or payable after taking into
account any reduction in consolidated tax liability due to available tax credits
or deductions and any tax sharing arrangements, (c) repayment of Indebtedness
that is required to be repaid in connection with such Asset Sale and (d)
appropriate amounts (determined by the Chief Financial Officer of the Company)
to be provided by the Company or any Restricted Subsidiary, as the case may be,
as a reserve, in accordance with GAAP, against any
-16-
post-closing adjustments or 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.
"Net Proceeds Offer" has the meaning set forth in Section 4.16.
"Net Proceeds Offer Amount" has the meaning set forth in Section 4.16.
"Net Proceeds Offer Payment Date" has the meaning set forth in Section
4.16.
"Net Proceeds Offer Trigger Date" has the meaning set forth in Section
4.16.
"Net Working Capital" means (i) all current assets of the Company and its
consolidated Subsidiaries, minus (ii) all current liabilities of the Company and
its consolidated 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-U.S. Person" means a person who is not a U.S. person, as defined in
Regulation S.
"Notes" means the Initial Notes and the Exchange Notes treated as a single
class of securities, as amended or supplemented from time to time in accordance
with the terms hereof, that are issued pursuant to this Indenture.
"Officer" means, (a) with respect to any corporation, the Chairman of the
Board of Directors, the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Treasurer, the Controller, or the
Secretary of such Person, or any other officer designated by the Board of
Directors serving in a similar capacity, (b) with respect to any other Person,
the individuals selected by such Person to perform functions similar to those of
the officers listed in clause (a), and (c) with respect to the Trustee or any
agent of the Trustee, a "Trust Officer."
"Officers' Certificate" means a certificate signed by two Officers of the
Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
11.04 and 11.05, as they relate to the giving of an Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.03.
"Payment Restriction" shall have the meaning set forth in Section 4.13.
"Pari Passu Indebtedness" means any Indebtedness of the Company or any
Subsidiary Guarantor that ranks pari passu in right of payment with the Notes or
such Guarantees, as applicable (other than the Company's 10% Senior Notes due
2007).
-17-
"Permitted Indebtedness" means, without duplication, each of the following:
(1) the Notes, the Exchange Notes, the Private Exchange Notes, if any, and
the Guarantees;
(2) Indebtedness incurred pursuant to the Senior Credit Facility in an
aggregate principal amount at any time outstanding not to exceed $325.0 million
under this clause (2);
(3) Interest Swap Obligations of the Company or a Restricted Subsidiary
covering Indebtedness of the Company or any of its Restricted Subsidiaries;
provided, however, that such Interest Swap Obligations are entered into to
manage the exposure of the Company and its Restricted Subsidiaries to
fluctuations in interest rates with respect to Indebtedness incurred in
accordance with this Indenture to the extent the net notional principal amount
of such Interest Swap Obligations does not exceed the principal amount of the
Indebtedness to which such Interest Swap Obligation relates;
(4) Indebtedness of a Restricted Subsidiary to the Company or to a
Restricted Subsidiary for so long as such Indebtedness is held by the Company or
a Restricted Subsidiary, in each case subject to no Lien held by a Person other
than the Company or a Restricted Subsidiary; provided, however, that if as of
any date any Person other than the Company or a Restricted Subsidiary owns or
holds any such Indebtedness or holds a Lien in respect of such Indebtedness,
such date shall be deemed the incurrence of Indebtedness not constituting
Permitted Indebtedness under this clause (4) by the issuer of such Indebtedness;
(5) Indebtedness of the Company to a Restricted Subsidiary for so long as
such Indebtedness is held by a Restricted Subsidiary, in each case subject to no
Lien; provided, however, that (i) any Indebtedness of the Company to any
Restricted Subsidiary that is not a Subsidiary Guarantor is unsecured and
subordinated, pursuant to a written agreement, to the Company's obligations
under this Indenture and the Notes and (ii) if as of any date any Person other
than a Restricted Subsidiary owns or holds any such Indebtedness or holds a Lien
in respect of such Indebtedness, such date shall be deemed the incurrence of
Indebtedness not constituting Permitted Indebtedness under this clause (5) by
the Company;
(6) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is extinguished
within two Business Days of incurrence;
(7) Indebtedness of the Company or any of its Restricted Subsidiaries
represented by letters of credit for the account of the Company or such
Restricted Subsidiary, as the case may be, in order to provide security for
workers' compensation claims or for payment obligations in connection with
self-insurance, bid, performance, appeal or surety bonds or for completion or
performance guarantees or obligations or for similar requirements in the
ordinary course of business;
-18-
(8) Refinancing Indebtedness;
(9) Capitalized Lease Obligations and Purchase Money Indebtedness of the
Company or any of its Restricted Subsidiaries incurred after the Issue Date not
to exceed $15.0 million at any one time outstanding;
(10) obligations arising in connection with Crude Oil and Natural Gas Hedge
Agreements of the Company or a Restricted Subsidiary;
(11) Indebtedness under Currency Agreements; provided, however, that in the
case of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and its Restricted
Subsidiaries outstanding other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder; and
(12) additional Indebtedness of the Company or any of its Restricted
Subsidiaries in an aggregate principal amount at any time outstanding not to
exceed the greater of (i) $20.0 million or (ii) 5.0% of Adjusted Consolidated
Net Tangible Assets of the Company.
In the event that an item of Indebtedness or proposed Indebtedness
(including without limitation Acquired Indebtedness) meets the criteria of more
than one of the categories of Permitted Indebtedness described in clauses (1)
through (12) above, or is entitled to be incurred under Section 4.12 even if not
Permitted Indebtedness, the Company will be permitted to classify or later
reclassify (in whole or in part in its discretion) such item of Indebtedness in
any manner that complies with Section 4.12.
"Permitted Industry Investments" means:
(1) capital expenditures, including, without limitation, acquisitions of
Company Properties and interests therein;
(2) entry into operating agreements, joint ventures, working interests,
royalty interests, mineral leases, unitization agreements, pooling arrangements
or other similar or customary agreements, transactions, properties, interests or
arrangements, and Investments and expenditures in connection therewith or
pursuant thereto, in each case made or entered into in the ordinary course of
the oil and natural gas business, and exchanges of Company Properties for other
Company Properties of at least equivalent value as determined in good faith by
the Board of Directors of the Company; and
(3) Investments of operating funds on behalf of co-owners of Crude Oil and
Natural Gas Properties of the Company or the Subsidiaries pursuant to joint
operating agreements.
"Permitted Investments" means:
-19-
(1) Investments by the Company or any Restricted Subsidiary in any Person
that is or will become immediately after such Investment a Restricted Subsidiary
or that will merge or consolidate into the Company or a Restricted Subsidiary
that is not subject to any Payment Restriction;
(2) Investments in the Company by any Restricted Subsidiary; provided,
however, that any Indebtedness evidencing any such Investment held by a
Restricted Subsidiary that is not a Subsidiary Guarantor is unsecured and
subordinated, pursuant to a written agreement, to the Company's obligations
under the Notes and this Indenture;
(3) Investments in cash and Cash Equivalents;
(4) Investments made by the Company or its Restricted Subsidiaries as a
result of consideration received in connection with an Asset Sale made in
compliance with Section 4.16;
(5) Permitted Industry Investments;
(6) Investments to the extent that Qualified Capital Stock of the Company
is the consideration paid or provided by the Company; and
(7) additional Investments made after the Issue Date in an aggregate amount
not to exceed $10.0 million at any one time outstanding.
"Permitted Liens" means each of the following types of Liens:
(1) Liens existing as of the Issue Date to the extent and in the manner
such Liens are in effect on the Issue Date (and any extensions, replacements or
renewals thereof covering property or assets secured by such Liens on the Issue
Date);
(2) Liens securing Indebtedness outstanding under the Senior Credit
Facility;
(3) Liens securing the Notes and the Guarantees;
(4) Liens of the Company or a Restricted Subsidiary on assets of any
Restricted Subsidiary;
(5) Liens securing Refinancing Indebtedness which is incurred to Refinance
any Indebtedness which has been secured by a Lien permitted under this Indenture
and which has been incurred in accordance with the provisions of this Indenture;
provided, however, that such Liens (x) are no less favorable to the Holders and
are not more favorable to the lienholders with respect to such Liens than the
Liens in respect of the Indebtedness being Refinanced and (y) do not extend to
or cover any property or assets of the Company or any of its Restricted
Subsidiaries not securing the Indebtedness so Refinanced;
-20-
(6) Liens for taxes, assessments or governmental charges or claims either
not delinquent or contested in good faith by appropriate proceedings and as to
which the Company or a Restricted Subsidiary, as the case may be, shall have set
aside on its books such reserves as may be required pursuant to GAAP;
(7) statutory and contractual Liens of landlords to secure rent arising in
the ordinary course of business to the extent such Liens relate only to the
tangible property of the lessee which is located on such property 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
yet 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;
(8) Liens incurred or deposits made in the ordinary course of business (i)
in connection with workers' compensation, unemployment insurance and other types
of social security, including any Lien securing letters of credit issued in the
ordinary course of business consistent with past practice in connection
therewith, or (ii) to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (including letters of credit
in connection therewith, but exclusive of obligations for the payment of
borrowed money);
(9) judgment and attachment Liens not giving rise to an Event of Default;
(10) easements, rights-of-way, zoning restrictions, restrictive covenants,
minor imperfections in title and other similar charges or encumbrances in
respect of real property not interfering in any material respect with the
ordinary conduct of the business of the Company or any of its Restricted
Subsidiaries;
(11) any interest or title of a lessor under any Capitalized Lease
Obligation; provided that such Liens do not extend to any property or assets
which is not leased property subject to such Capitalized Lease Obligation;
(12) Liens securing Purchase Money Indebtedness of the Company or any
Restricted Subsidiary; provided, however, that (i) the Purchase Money
Indebtedness shall not be secured by any property or assets of the Company or
any Restricted Subsidiary other than the property and assets so acquired or
constructed (except for proceeds, improvements, rents and similar items relating
to the property or assets so acquired or constructed) and (ii) the Lien securing
such Indebtedness shall be created within 90 days of such acquisition or
construction;
(13) 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;
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(14) 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;
(15) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Indenture and Liens securing Crude Oil and Natural Gas Hedge Agreements;
(16) Liens securing Acquired Indebtedness incurred in accordance with
Section 4.12; provided, however, that (i) such Liens secured such Acquired
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary and were not granted in
connection with, or in anticipation of, the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary and (ii) such Liens do
not extend to or cover any property or assets of the Company or of any of its
Restricted Subsidiaries other than the property or assets that secured the
Acquired Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of the Company or a Restricted Subsidiary (except for proceeds,
improvements, rents and similar items relating to the property or assets so
secured) and are no more favorable to the lienholders than those securing the
Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by
the Company or a Restricted Subsidiary;
(17) Liens on, or related to, properties and assets of the Company and its
Subsidiaries to secure all or a part of the costs incurred in the ordinary
course of business of exploration, drilling, development, production,
processing, gas gathering, transportation, marketing or storage, or operation
thereof;
(18) Liens on pipeline or pipeline facilities, Hydrocarbons or properties
and assets of the Company and its Subsidiaries which arise out of operation of
law;
(19) royalties, overriding royalties, revenue interests, net revenue
interests, net profit interests, reversionary interests, production payments,
production sales contracts, preferential rights of purchase, operating
agreements, working interests and other similar interests, properties,
arrangements and agreements, all as ordinarily exist with respect to Properties
and assets of the Company and its Subsidiaries or otherwise as are customary in
the oil and gas business;
(20) with respect to any Properties and assets of the Company and its
Subsidiaries, Liens arising under, or in connection with, or related to,
farm-out, farm-in, joint operation, area of mutual interest agreements and/or
other similar or customary arrangements, agreements or interests that the
Company or any Subsidiary determines in good faith to be necessary for the
economic development of such Property;
(21) any (a) interest or title of a lessor or sublessor under any lease,
(b) restriction or encumbrance that the interest or title of such lessor or
sublessor may be subject to (including, without limitation, ground leases or
other prior leases of the demised premises, mortgages,
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mechanics' liens, tax liens, and easements), or (c) subordination of the
interest of the lessee or sublessee under such lease to any restrictions or
encumbrance referred to in the preceding clause (b);
(22) Liens in favor of collecting or payor banks having a right of setoff,
revocation, refund or chargeback with respect to money or instruments of the
Company or any Restricted Subsidiary on deposit with or in possession of such
bank; and
(23) Liens incurred in the ordinary course of business and not exceeding
$15.0 million in the aggregate at any one time.
"Person" means an individual, partnership, corporation, unincorporated
organization, limited liability company, trust, estate, or joint venture, or a
governmental agency or political subdivision thereof.
"Physical Notes" has the meaning provided in Section 2.01.
"Preferred Stock" of any Person means any Capital Stock of such Person that
has preferential rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation.
"principal" of any Indebtedness (including the Notes) means the principal
amount of such Indebtedness plus the premium, if any, on such Indebtedness.
"Private Exchange Notes" means unsecured senior notes of the Company,
guaranteed by the Subsidiary Guarantors, issued in exchange for the Notes and
identical in all material respects to the Exchange Notes, except for the
placement of a restrictive legend on such Private Exchange Notes.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.15.
"pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms of this Indenture, a calculation in accordance with
Article 11 of Regulation S-X under the Securities Act, as determined by the
Board of Directors of the Company in consultation with its independent public
accountants.
"Property" means, with respect to any Person, any interests of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including, without limitation, Capital Stock, partnership
interests and other equity or ownership interests in any other Person.
"Purchase Money Indebtedness" means Indebtedness the net proceeds of which
are used to finance the cost (including the cost of construction) of property or
assets acquired in the normal course of business by the Person incurring such
Indebtedness.
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"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning specified
in Rule 144A under the Securities Act.
"Record Date" means the Record Dates specified in the Notes.
"Redemption Date," when used with respect to any Note to be redeemed, means
the date fixed for such redemption pursuant to this Indenture and the Notes.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price fixed for such redemption, including principal and premium, if
any, pursuant to this Indenture and the Notes.
8 "Reference Date" has the meaning set forth in Section 4.10.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
Restricted Subsidiary of the Company of Indebtedness incurred in accordance with
Section 4.12 (other than pursuant to clause (2), (3), (4), (5), (6), (7), (9),
(10), (11) or (12) of the definition of Permitted Indebtedness), in each case
that does not:
(1) result in an increase in the aggregate principal amount of Indebtedness
of such Person as of the date of such proposed Refinancing (plus the amount of
any premium required to be paid under the terms of the instrument governing such
Indebtedness and plus the amount of reasonable expenses incurred by the Company
and its Restricted Subsidiaries in connection with such Refinancing); or
(2) create Indebtedness with (x) a Weighted Average Life to Maturity that
is less than the Weighted Average Life to Maturity of the Indebtedness being
Refinanced or (y) a final maturity earlier than the final maturity of the
Indebtedness being Refinanced; provided, however, that (a) if such Indebtedness
being Refinanced is Indebtedness of the Company or a Subsidiary Guarantor, then
such Refinancing Indebtedness shall be Indebtedness solely of the Company and/or
such Subsidiary Guarantor and (b) if such Indebtedness being Refinanced is
subordinate or junior to the Notes or a Guarantee, then such Refinancing
Indebtedness shall be subordinate to the Notes or such Guarantee, as the case
may be, at least to the same extent and in the same manner as the Indebtedness
being Refinanced.
"Registrar" has the meaning provided in Section 2.03.
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"Registration Rights Agreement" means the Registration Rights Agreement
dated as of the Issue Date among the Company, the Subsidiary Guarantors and the
Initial Purchasers (as defined therein), or, with respect to Additional Notes,
any registration rights agreement entered into in connection with such issuance
thereof.
"Regulation S" means Regulation S under the Securities Act.
"Related Person" of any Person means any other Person directly or
indirectly owning 10% or more of the outstanding voting Common Stock of such
Person (or, in the case of a Person that is not a corporation, 10% or more of
the equity interest in such Person).
"Replacement Assets" shall have the meaning set forth in Section 4.16.
"Restricted Payment" shall have the meaning set forth in Section 4.10.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to request and conclusively rely on an Opinion of Counsel with respect
to whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company that has not
been designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to and in compliance with Section 4.14. Any such designation
may be revoked by a Board Resolution of the Company delivered to the Trustee,
subject to the provisions of Section 4.14.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Rating Services, a division of The McGraw
Hill Companies, Inc., and its successors.
"Sale and Leaseback Transaction" means any direct or indirect arrangement
with any Person or to which any such Person is a party, providing for the
leasing to the Company or a Restricted Subsidiary of any Property, whether owned
by the Company or any Restricted Subsidiary at the Issue Date or later acquired,
which has been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such Person or to any other Person from whom funds have been or
are to be advanced by such Person on the security of such Property.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Senior Credit Facility" means the Fourth Amended and Restated Credit
Agreement dated as of March 15, 2002 by and among the Company, Bankers Trust
Company, as Administrative Agent, and each of the lenders named therein, or any
successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders, together with the related documents thereto
(including, without limitation, any guarantee agreements and security
documents), in each case as such agreements may be amended (including any
amendment and restatement thereof), supplemented or otherwise modified from time
to time, including any agreements extending the maturity of,
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refinancing, replacing, increasing or otherwise restructuring all or any
portion of the Indebtedness under such agreements.
"Significant Subsidiary" means a Restricted Subsidiary of the Company that
is also a "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X
under the Securities Act.
"Subsidiary," with respect to any Person, means any corporation of which
the outstanding Capital Stock having at least a majority of the votes entitled
to be cast in the election of directors under ordinary circumstances shall at
the time be owned, directly or indirectly, by such Person or any other Person of
which at least a majority of the voting interest under ordinary circumstances is
at the time, directly or indirectly, owned by such Person.
"Subsidiary Guarantor" means each of the Company's Restricted Subsidiaries
as of the Issue Date (other than Inesco Corporation, SPL Gas Marketing Inc.,
Pintail Oil & Gas, Inc. and Midland Hunter Petroleum Limited Liability Company)
and each of the Company's Restricted Subsidiaries that in the future executes a
supplemental indenture in which such Restricted Subsidiary agrees to be bound by
the terms of this Indenture as a Subsidiary Guarantor; provided, however, that
any Person constituting a Subsidiary Guarantor as described above shall cease to
constitute a Subsidiary Guarantor when its Guarantee is released in accordance
with the terms of this Indenture.
"Surviving Entity" shall have the meaning set forth in Section 5.01.
"TCW Preferred Stock" means the one million shares of the Company's 1996
Series A Convertible Preferred Stock, $0.001 par value per share and a $10.00
stated value per share with a quarterly dividend rate of $0.21875 per share.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb), as in effect on the date of this Indenture; provided that in the
event the Trust Indenture Act of 1939 is amended after such date, "TIA" means,
to the extent required by any such amendment, the Trust Indenture Act of 1939 as
so amended.
"Trust Officer" means any officer within the Corporate Trust Office
including any Vice President, Managing Director, Director, Assistant Vice
President, Associate, or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge and familiarity with the
particular subject, or in the case of a successor trustee, an officer assigned
to the department, division or group performing the corporation trust work of
such successor and assigned to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
"U.S. Government Obligations" mean direct obligations of, and obligations
guaranteed by, the United States of America for the payment of which the full
faith and credit of the United States of America is pledged.
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"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Unrestricted Subsidiary" means any Subsidiary of the Company designated as
such pursuant to and in compliance with Section 4.14; provided, however, the
Unrestricted Subsidiaries shall initially include Xxxxxx Xxxxxxx International
Limited Liability Company, Canvasback Energy, Inc. and Redhead Energy, Inc. Any
such designation may be revoked by a Board Resolution of the Company delivered
to the Trustee, subject to the provisions of such Section 4.14.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (1) the then outstanding
aggregate principal amount of such Indebtedness into (2) the sum of the total of
the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such 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;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
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 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
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(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(6) any reference to a statute, law or regulation means that statute, law
or regulation as amended and in effect from time to time and includes any
successor statute, law or regulation; provided, however, that any reference to
the Bankruptcy Law shall mean the Bankruptcy Law as applicable to the relevant
case.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.
The Initial Notes and the Trustee's certificate of authentication relating
thereto shall be substantially in the form of Exhibit A hereto. The Exchange
Notes and the Trustee's certificate of authentication relating thereto shall be
substantially in the form of Exhibit B hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or depository rule
or usage. The Company and the Trustee shall approve the form of the Notes and
any notation, legend or endorsement on them. Each Note shall be dated the date
of its issuance and shall show the date of its authentication. Each Note shall
have an executed Guarantee endorsed thereon substantially in the form of Exhibit
E hereto.
The terms and provisions contained in the Notes, annexed hereto as Exhibits
A and B, shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A, Notes offered and sold to
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) and Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of one or more permanent
global Notes in registered form, substantially in the form set forth in Exhibit
A (the "Global Note"), deposited with the Trustee, as custodian for the
Depository, duly executed by the Company (and having an executed Guarantee
endorsed thereon) and authenticated by the Trustee as hereinafter provided and
shall bear the legend set forth in Section 2.15. The aggregate principal amount
of the Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depository,
as hereinafter provided.
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Notes issued in exchange for interests in a Global Note pursuant to Section
2.16 may be issued in the form of permanent certificated Notes in registered
form in substantially the form set forth in Exhibit A (the "Physical Notes").
SECTION 2.02. Execution and Authentication; Aggregate Principal Amount.
Two Officers, or an Officer and an Assistant Secretary of the Company,
shall sign, or one Officer shall sign and one Officer or an Assistant Secretary
(each of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to, the Notes for the Company by manual or
facsimile signature.
If an Officer or Assistant Secretary whose signature is on a Note or a
Guarantee was an Officer or Assistant Secretary at the time of such execution
but no longer holds that office or position at the time the Trustee
authenticates the Note, the Note shall nevertheless be valid.
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.
The Trustee shall authenticate (i) Initial Notes for original issue on the
Issue Date in the aggregate principal amount not to exceed $300,000,000, (ii)
subject to Section 4.12, Additional Notes and (iii) Exchange Notes from time to
time for issue only in exchange for a like principal amount of Initial Notes, in
each case upon a written order of the Company in the form of an Officers'
Certificate of the Company. Each such written order shall specify the amount of
Notes to be authenticated and the date on which the Notes are to be
authenticated, whether the Notes are to be Initial Notes, Additional Notes or
Exchange Notes and whether the Notes are to be issued as Physical Notes or
Global Notes or such other information as the Trustee may reasonably request.
Any Additional Notes shall be part of the same issue as the Notes being issued
on the Issue Date and will vote on all matters as one class with the Notes being
issued on the Issue Date, including, without limitation, waivers, amendments,
redemptions, Change of Control Offers and Net Proceeds Offers. For the purposes
of this Indenture, except for Section 4.12, references to the Notes include
Additional Notes, if any. In addition, with respect to authentication pursuant
to clauses (ii) and (iii) of the first sentence of this paragraph, the first
such written order from the Company shall be accompanied by an Opinion of
Counsel of the Company in a form reasonably satisfactory to the Trustee stating
that the issuance of the Additional Notes or Exchange Notes does not give rise
to an Event of Default, complies with this Indenture and has been duly
authorized by the Company.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the 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 Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company or with any Affiliate of the Company.
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The Notes shall be issuable in fully registered form only, without coupons,
in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be located in
the Borough of Manhattan in the City of New York, State of New York) where (a)
Notes may be presented or surrendered for registration of transfer or for
exchange ("Registrar"), (b) Notes may be presented or surrendered for payment
("Paying Agent") and (c) notices and demands to or upon the Company in respect
of the Notes and this Indenture may be served. The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company, upon
prior written notice to the Trustee, may have one or more co-Registrars and one
or more additional paying agents reasonably acceptable to the Trustee. The term
"Paying Agent" includes any additional Paying Agent. The Company may act as its
own Paying Agent, except that, for the purposes of payments on the Notes
pursuant to Sections 4.15 and 4.16, neither the Company nor any Affiliate of the
Company may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture, which agreement shall incorporate the provisions
of the TIA and implement the provisions of this Indenture that relate to such
Agent. The Company shall notify the Trustee, in advance, of the name and address
of any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
or fails to give the foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. Any of
the Registrar, the Paying Agent or any other agent may resign upon 30 days'
notice to the Company.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that such Paying Agent shall hold in trust for the benefit of the
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, premium, if any, or interest on, the Notes (whether such assets
have been distributed to it by the Company or any other obligor on the Notes),
and the Company and the Paying Agent shall notify the Trustee of any Default by
the Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any payment Default, upon written request to
a Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets distributed. If the Company acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all assets held by it as Paying Agent. Upon distribution
to the Trustee of all assets that shall have been delivered by the Company to
the Paying Agent, the Paying Agent (if other than the Company) shall have no
further liability for such assets.
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SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish or cause the Registrar to furnish
to the Trustee before each Record Date and at such other times as the Trustee
may request in writing a list as of such date and in such form as the Trustee
may reasonably require of the names and addresses of the Holders, which list may
be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
When Notes are presented to the Registrar or a co-Registrar with a request
to register the transfer of such Notes or to exchange such Notes for an equal
principal amount of Notes or other authorized denominations, the Registrar or
co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; provided, however, that the Notes
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Company, the Trustee and the Registrar or co-Registrar, duly executed by
the Holder thereof or his attorney duly authorized in writing. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Notes and the Subsidiary Guarantors shall execute
Guarantees thereon at the Registrar's or co-Registrar's request. 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, fee
or similar governmental charge payable in connection therewith (other than any
such transfer taxes or similar governmental charge payable upon exchanges or
transfers pursuant to Sections 2.10, 3.03, 4.15, 4.16 or 9.05, in which event
the Company shall be responsible for the payment of such taxes).
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing and (ii) selected for
redemption in whole or in part pursuant to Article Three, except the unredeemed
portion of any Note being redeemed in part.
Any Holder of a beneficial interest in a Global Note shall, by acceptance
of such Global Note, agree that transfers of beneficial interests in such Global
Notes may be effected only through a book entry system maintained by the Holder
of such Global Note (or its agent), and that ownership of a beneficial interest
in the Note shall be required to be reflected in a book entry system.
SECTION 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee 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 and
the Subsidiary Guarantors shall execute a Guarantee thereon if the Trustee's
requirements are met. If required by the Trustee or the Company, such Holder
must provide an indemnity bond or other indemnity of reasonable tenor,
sufficient in the reasonable judgment of the Company, the Subsidiary Guarantors
and the Trustee, to protect the Company, the
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Subsidiary Guarantors, the Trustee or any Agent from any loss which any of
them may suffer if a Note is replaced. Every replacement Note shall constitute
an additional obligation of the Company and the Subsidiary Guarantors.
SECTION 2.08. Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those canceled by it, those delivered to it
for cancellation, those reductions in the interest in a Global Note effected by
the Trustee in accordance with the provisions hereof and those described in this
Section as not outstanding. Subject to the provisions of Section 2.09, a Note
does not cease to be outstanding because the Company or any of its Affiliates
holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated Note
surrendered for replacement), it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Note is held by a bona fide
purchaser for value. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent (other than
the Company, a Subsidiary or an Affiliate of any thereof) holds U.S. Legal
Tender or U.S. Government Obligations sufficient to pay all of the principal,
premium, if any, and interest due on the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Notes shall be deemed not to
be outstanding and interest on them shall cease to accrue.
SECTION 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company or an Affiliate of the Company shall be considered as though they
are not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes which a Trust Officer of the Trustee actually knows are so owned
shall be so considered. The Company shall notify the Trustee, in writing, when
either of them or, to their knowledge, any of their Affiliates repurchases or
otherwise acquires Notes, of the aggregate principal amount of such Notes so
repurchased or otherwise acquired and such other information as the Trustee may
reasonably request and the Trustee shall be entitled to rely thereon.
SECTION 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon receipt of a written order
of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company consider appropriate for temporary Notes and so indicate in the
Officers' Certificate. Without unreasonable delay, the Company shall prepare,
the Trustee shall authenticate and the Subsidiary
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Guarantors shall execute Guarantees on, upon receipt of a written order of
the Company pursuant to Section 2.02, definitive Notes in exchange for temporary
Notes.
SECTION 2.11. 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 transfer, exchange or payment. The Trustee, or at the
direction of the Trustee, the Registrar or the Paying Agent, and no one else,
shall cancel and, at the written direction of the Company, shall dispose, in its
customary manner, of all Notes surrendered for transfer, exchange, payment or
cancellation. The Trustee shall maintain a record of all canceled Notes. Subject
to Section 2.07, the Company may not issue new Notes to replace Notes that they
have paid or delivered to the Trustee for cancellation. If the Company shall
acquire any of the Notes, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Notes unless and until the
same are surrendered to the Trustee for cancellation pursuant to this Section
2.11.
SECTION 2.12. Defaulted Interest.
The Company will pay interest on overdue principal from time to time on
demand at the rate of interest then borne by the Notes. The Company shall, to
the extent lawful, pay interest on overdue installments of interest (without
regard to any applicable grace periods) from time to time on demand at the rate
of interest then borne by the Notes. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months, and, in the case of a partial
month, the actual number of days elapsed.
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest, plus (to the extent lawful) any interest payable on the
defaulted interest, to the Persons who are Holders on a subsequent special
record date, which special record date shall be the fifteenth day next preceding
the date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. The Company shall
notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Note and the date of the proposed payment (a "Default Interest
Payment Date"), and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in respect
of such defaulted interest or shall make arrangements satisfactory to the
Trustee for such deposit on or prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such defaulted interest as provided in this Section; provided, however, that
in no event shall the Company deposit monies proposed to be paid in respect of
defaulted interest later than 11:00 a.m. New York City time of the proposed
Default Interest Payment Date. At least 15 days before the subsequent special
record date, the Company shall mail (or cause to be mailed) to each Holder, as
of a recent date selected by the Company, with a copy to the Trustee, a notice
that states the subsequent special record date, the payment date and the amount
of defaulted interest, and interest payable on such defaulted interest, if any,
to be paid. Notwithstanding the foregoing, any interest which is paid prior to
the expiration of the 30-day period set forth in Section 6.01(a) shall be paid
to Holders as of the regular record date for the Interest Payment Date for which
interest has not been paid. Notwithstanding the foregoing, the Company may make
payment of
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any defaulted interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange.
SECTION 2.13. CUSIP Number.
The Company in issuing the Notes may use a "CUSIP" number, and, if so, the
Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; provided, however, that no representation is hereby
deemed to be made by the Trustee as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in the CUSIP number.
SECTION 2.14. Deposit of Monies.
Prior to 11:00 a.m. New York City time on each Interest Payment Date,
Maturity Date, Redemption Date, Change of Control Payment Date and Net Proceeds
Offer Payment Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Payment Date and Net Proceeds Offer Payment Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Payment Date and Net Proceeds Offer Payment Date, as the case may be.
SECTION 2.15. Restrictive Legends.
Each Global Note and Physical Note that constitutes a Restricted Security
shall bear the following legend (the "Private Placement Legend") on the face
thereof until after the second anniversary of the later of the Issue Date (or,
in the case of Additional Notes, the issue date of such Additional Notes) and
the last date on which the Company or any Affiliate of the Company was the owner
of such Note (or any predecessor security) (or such shorter period of time as
permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder) (or such longer period of time as may be required under the
Securities Act or applicable state securities laws in the opinion of counsel for
the Company, unless otherwise agreed by the Company and the Holder thereof):
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT), (AN "ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
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SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO MAGNUM HUNTER RESOURCES, INC. OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON
ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS
NOTE), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF
MAGNUM HUNTER RESOURCES, INC. SO REQUESTS) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Each Global Note shall also bear the following legend on the face thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO MAGNUM
HUNTER RESOURCES, INC. 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
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REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.17 OF THE INDENTURE.
SECTION 2.16. Book-Entry Provisions for Global Security.
(a) The Global Notes initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, (ii) be delivered to the Trustee
as custodian for such Depository and (iii) bear legends as set forth in Section
2.15.
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 the Trustee as its custodian, or under the Global
Notes, and the Depository may be treated by the Company, the Trustee and any
Agent of the Company or the Trustee as the absolute owner of such Global 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 governing the exercise of the
rights of a Holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers in whole, but
not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in a Global Note may be transferred or exchanged
for Physical Notes in accordance with the rules and procedures of the Depository
and the provisions of Section 2.17. In addition, Physical Notes shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a Global Note if (i) the Depository notifies the Company that it is unwilling
or unable to continue as Depository for the Global Notes and a successor
depositary is not appointed by the Company within 90 days of such notice or (ii)
an Event of Default has occurred and is continuing and the Registrar has
received a written request from the Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in a Global Note to beneficial owners pursuant to paragraph
(b), the Registrar shall (if one or more Physical Notes are to be issued)
reflect on its books and records the date and a decrease in the principal amount
of such Global Note in an amount equal to the principal amount of the beneficial
interest in the Global Note to be transferred, and the Company shall execute,
the Subsidiary Guarantors shall
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execute Guarantees on, and the Trustee shall authenticate and deliver, one
or more Physical Notes of like tenor and amount.
(d) In connection with the transfer of an entire Global Note to beneficial
owners pursuant to paragraph (b), such Global Note shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, the
Subsidiary Guarantors shall execute Guarantees on and the Trustee shall
authenticate and deliver, to each beneficial owner identified by the Depository
in exchange for its beneficial interest in the Global Note, an equal aggregate
principal amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Security delivered in
exchange for an interest in a Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by paragraphs (a)(i)(x) and (d) of Section
2.17, bear the legend regarding transfer restrictions applicable to the Physical
Notes set forth in Section 2.15.
(f) The Holder of a Global Note may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.
SECTION 2.17. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S.
Persons. The following provisions shall apply with respect to the registration
of any proposed transfer of a Note constituting a Restricted Security to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note constituting a
Restricted Security, whether or not such Note bears the Private Placement
Legend, if (x) the requested transfer is after the second anniversary of the
Issue Date (or, with respect to Additional Notes, the issue date of such
Additional Notes); provided, however, that neither the Company nor any Affiliate
of the Company has held any beneficial interest in such Note, or portion
thereof, at any time on or prior to the second anniversary of the Issue Date
(or, with respect to Additional Notes, the issue date of such Additional Notes)
or (y) (1) in the case of a transfer to an Institutional Accredited Investor
which is not a QIB (excluding Non-U.S. Persons), the proposed transferee has
delivered to the Registrar a certificate substantially in the form of Exhibit C
hereto and the proposed transferor has delivered to the Registrar a certificate
substantially in the form of Exhibit F hereto or (2) in the case of a transfer
to a Non-U.S. Person, the proposed transferor has delivered to the Registrar
certificates substantially in the form of Exhibit D and Exhibit F hereto and
with respect to clauses (1) and (2), such certifications, legal opinions and
other information as the Trustee and the Company may reasonably request; and
(ii) if the proposed transferee is an Agent Member and the Notes to be
transferred consist of Physical Notes which after transfer are to be evidenced
by an interest in a Global Note, upon receipt by the Registrar of (x) written
instructions given in accordance with the Depository's and the Registrar's
procedures and (y) the appropriate certificate, if any,
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required by clause (y) of paragraph (i) above, the Registrar shall register
the transfer and reflect on its books and records the date and an increase in
the principal amount of such Global Note, in an amount equal to the principal
amount of Physical Notes to be transferred, and the Trustee shall cancel the
Physical Notes so transferred; and
(iii) if the proposed transferor is an Agent Member seeking to transfer an
interest in a Global Note, upon receipt by the Registrar of (x) written
instructions given in accordance with the Depository's and the Registrar's
procedures and (y) the appropriate certificate, if any, required by clause (y)
of paragraph (i) above, the Registrar shall register the transfer and reflect on
its books and records the date and (A) a decrease in the principal amount of the
Global Note from which such interests are to be transferred in an amount equal
to the principal amount of the Notes to be transferred and (B) an increase in
the principal amount of the Global Note, in an amount equal to the principal
amount of the Notes to be transferred.
(b) Transfers to QIBs. The following provisions shall apply with respect to
the registration of any proposed transfer of a Note constituting a Restricted
Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is being
made by a proposed transferor who has delivered to the Registrar a certificate
substantially in the form of Exhibit F hereto and has checked the box provided
for on such certificate stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on such certificate stating, or has otherwise advised the Company
and the Registrar in writing, that it is purchasing the 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 QIB within the meaning of Rule 144A, and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as it
has requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to be
transferred consist of Physical Notes which after transfer are to be evidenced
by an interest in a Global Note, upon receipt by the Registrar of written
instructions given in accordance with the Depository's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date and an
increase in the principal amount of such Global Note in an amount equal to the
principal amount of the Physical Notes to be transferred, and the Trustee shall
cancel the Physical Notes so transferred; and
(iii) if the proposed transferor is an Agent Member seeking to transfer an
interest in a Global Note, upon receipt by the Registrar of written instructions
given in accordance with the Depository's and the Registrar's procedures, the
Registrar shall register the transfer and reflect on its books and records the
date and (A) a decrease in the principal amount of the Global Note in an amount
equal to the principal amount of the Notes to be transferred and
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(B) an increase in the principal amount of the Global Note in an amount
equal to the principal amount of the Notes to be transferred.
(c) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding
any other provisions of this Indenture, 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 any such nominee to a successor
Depository or a nominee of such successor Depository.
(d) Private Placement Legend. Upon the transfer, exchange or replacement of
Notes not bearing the Private Placement Legend, the Registrar shall deliver
Notes that do not bear the Private Placement Legend. Upon the transfer, exchange
or replacement of Notes bearing the Private Placement Legend, the Registrar
shall deliver only Notes that bear the Private Placement Legend unless (i) the
requested transfer is after the second anniversary of the Issue Date; provided,
however, that neither the Company nor any Affiliate of the Company has held any
beneficial interest in such Note, or portion thereof, at any time prior to or on
the second anniversary of the Issue Date (or, with respect to Additional Notes,
the issue date of such Additional Notes), or (ii) there is delivered to the
Registrar an Opinion of Counsel reasonably satisfactory to the Company and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of the
Securities Act.
(e) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.16 or this Section 2.17. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time during the
Registrar's normal business hours upon the giving of reasonable written notice
to the Registrar.
(f) Transfers of Notes Held by Affiliates. Any certificate (i) evidencing a
Note that has been transferred to an Affiliate of the Company within two years
after the Issue Date (or, with respect to Additional Notes, the issue date of
such Additional Notes), as evidenced by a notation on the Assignment Form for
such transfer or in the representation letter delivered in respect thereof or
(ii) evidencing a Note that has been acquired from an Affiliate (other than by
an Affiliate) in a transaction or a chain of transactions not involving any
public offering, shall, until two years after the last date on which the Company
or any Affiliate of the Company was an owner of such Note, in each case, bear a
legend in substantially the form of the Private Placement Legend, unless
otherwise agreed by the Company (with written notice thereof to the Trustee).
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SECTION 2.18. Additional Interest Under Registration Rights Agreement.
Under certain circumstances, the Company shall be obligated to pay
Additional Interest to the Holders, all as set forth in the Registration Rights
Agreement. The terms thereof are hereby incorporated herein by reference.
SECTION 2.19. Designation.
The Indebtedness evidenced by the Notes and the Guarantees is hereby
irrevocably designated as "senior indebtedness" or such other term denoting
seniority for the purposes of any other existing or future Indebtedness of the
Company or a Guarantor, as the case may be, which the Company or such Guarantor,
as the case may be, makes subordinate to any senior (or such other term denoting
seniority) indebtedness of such Person.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to Paragraph 5 of the Notes,
it shall notify the Trustee and the Paying Agent in writing of the Redemption
Date and the principal amount of the Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.01 60
days before the Redemption Date (unless a shorter notice period shall be
satisfactory to the Trustee, as evidenced in a writing signed on behalf of the
Trustee), together with an Officers' Certificate stating that such redemption
shall comply with the conditions contained herein and in the Notes.
SECTION 3.02. Selection of Notes To Be Redeemed.
In the event that less than all of the Notes are to be redeemed at any
time, selection of such Notes, or portions thereof, for redemption will be made
by the Trustee either in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed or, if the
Notes are not then listed on a national securities exchange, on a pro rata
basis, by lot or by such other method as the Trustee shall deem fair and
appropriate. No Notes of a principal amount of $1,000 or less shall be redeemed
in part. If a partial redemption is made with the proceeds of an Equity
Offering, selection of the Notes or portions thereof for redemption shall be
made by the Trustee only on a pro rata basis or on as nearly a pro rata basis as
is practicable (subject to the procedures of the Depository), unless such method
is otherwise prohibited. Notice of redemption shall be mailed by first-class
mail at least 30 but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at its registered address. If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note shall
state the portion of the principal amount thereof to be redeemed. A new Note in
a principal amount equal to the unredeemed portion thereof will be issued
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in the name of the Holder thereof upon cancellation of the original Note.
On and after the applicable Redemption Date, interest will cease to accrue on
Notes or portions thereof called for redemption as long as the Company has
deposited with the Paying Agent for the Notes funds in satisfaction of the
applicable Redemption Price.
SECTION 3.03. Optional Redemption.
The Notes will be redeemable, at the Company's option, in whole at any time
or in part from time to time, on and after March 15, 2007, upon not less than 30
nor more than 60 days' notice, at the following Redemption Prices (expressed as
percentages of the principal amount thereof) if redeemed during the twelve-month
period commencing on March 15 of the years set forth below, plus, in each case,
accrued interest, if any, thereon to the date of redemption:
Year Percentage
---- ----------
2007...................................... 104.800%
2008...................................... 103.200%
2009...................................... 101.600%
2010 and thereafter....................... 100.000%
At any time, or from time to time, on or prior to March 15, 2005, the
Company may, at its option, use all or a portion of the net cash proceeds of one
or more Equity Offerings to redeem up to 35% of the aggregate principal amount
of the Notes issued at a redemption price equal to 109.600% of the aggregate
principal amount of the Notes to be redeemed, plus accrued interest, if any,
thereon to the date of redemption; provided, that: (1) at least 65% of the
aggregate principal amount of Notes issued remains outstanding immediately after
giving effect to any such redemption; and (2) the Company makes such redemption
not more than 60 days after the consummation of any such Equity Offering.
SECTION 3.04. Notice of Redemption.
In connection with a redemption pursuant to Section 3.03, at least 30 days
but not more than 60 days before a Redemption Date, the Company shall mail or
cause to be mailed a notice of redemption by first class mail to each Holder of
Notes to be redeemed at its registered address, with a copy to the Trustee and
any Paying Agent. At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. The Company shall
provide such notices of redemption to the Trustee at least five Business Days
before the intended mailing date.
Each notice of redemption shall identify (including the CUSIP number) the
Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any, to be
paid;
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(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which such redemption is
being made;
(5) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price plus accrued interest, if any;
(6) that, unless the Company defaults in making the redemption payment,
interest on Notes or applicable portions thereof called for redemption ceases to
accrue on and after the Redemption Date, and the only remaining right of the
Holders of such Notes is to receive payment of the Redemption Price plus accrued
interest as of the Redemption Date, if any, upon surrender to the Paying Agent
of the Notes redeemed;
(7) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the Redemption Date, and upon
surrender of such Note, a new Note or Notes in the aggregate principal amount
equal to the unredeemed portion thereof will be issued; and
(8) if fewer than all the Notes are to be redeemed, the identification of
the particular Notes (or portion thereof) to be redeemed, as well as the
aggregate principal amount of Notes to be redeemed and the aggregate principal
amount of Notes to be outstanding after such partial redemption.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the purchase
of Notes.
SECTION 3.05. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.04, such
notice of redemption shall be irrevocable and Notes called for redemption shall
become due and payable on the Redemption Date and at the Redemption Price plus
accrued interest as of such date, if any. Upon surrender to the Trustee or
Paying Agent, such Notes called for redemption shall be paid at the Redemption
Price plus accrued interest thereon to the Redemption Date, but installments of
interest, the maturity of which is on or prior to the Redemption Date, shall be
payable to Holders of record at the close of business on the relevant Record
Dates referred to in the Notes. Interest shall accrue on or after the Redemption
Date and shall be payable only if the Company defaults in payment of the
Redemption Price.
SECTION 3.06. Deposit of Redemption Price.
On or before the Redemption Date and in accordance with Section 2.14, the
Company shall deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Redemption Price plus accrued interest, if any, of all Notes to be redeemed
on that date. The Paying Agent shall promptly
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return to the Company any U.S. Legal Tender so deposited which is not
required for that purpose, except with respect to monies owed as obligations to
the Trustee pursuant to Article Seven.
Unless the Company fails to comply with the preceding paragraph and default
in the payment of such Redemption Price plus accrued interest, if any, interest
on the Notes to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Notes are presented for payment.
SECTION 3.07. Notes Redeemed in Part.
Upon surrender of a Note that is to be redeemed in part, the Trustee shall
authenticate for the Holder a new Note or Notes equal in principal amount to the
unredeemed portion of the Note surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.
(a) The Company shall pay the principal of, premium, if any, and interest
on the Notes on the dates and in the manner provided in the Notes and in this
Indenture.
(b) An installment of principal of or interest on the Notes shall be
considered paid on the date it is due if the Trustee or Paying Agent (other than
the Company or any of its Affiliates) holds, prior to 11:00 a.m. New York City
time on that date, U.S. Legal Tender designated for and sufficient to pay the
installment in full and is not prohibited from paying such money to the Holders
pursuant to the terms of this Indenture or the Notes.
(c) Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.02.
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SECTION 4.03. Corporate Existence.
Except as otherwise permitted by Article Five, the Company shall do or
cause to be done, at its own cost and expense, all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate or
organizational existence of each of its Restricted Subsidiaries in accordance
with the respective organizational documents of each such Restricted Subsidiary
and the material rights (charter and statutory) and franchises of the Company
and each such Restricted Subsidiary; provided, however, that the Company shall
not be required to preserve, with respect to itself, any material right or
franchise and, with respect to any of its Restricted Subsidiaries, any such
existence, material right or franchise, if the Board of Directors of the Company
shall determine in good faith that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole.
SECTION 4.04. 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, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Restricted
Subsidiaries or properties of it or any of its Restricted Subsidiaries and (ii)
all material lawful claims for labor, materials and supplies that, if unpaid,
might by law become a Lien upon the property of the Company or any of its
Restricted Subsidiaries; 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 negotiations or proceedings properly
instituted and diligently conducted for which adequate reserves, to the extent
required under GAAP, have been taken.
SECTION 4.05. Maintenance of Properties and Insurance.
(a) The Company shall, and shall cause each of the Restricted Subsidiaries
to, maintain all properties used or useful in the conduct of its business in
good working order and condition (subject to ordinary wear and tear) and make
all necessary repairs, renewals, replacements, additions, betterments and
improvements thereto and actively conduct and carry on its business; provided,
however, that nothing in this Section 4.05 shall prevent the Company or any of
the Restricted Subsidiaries from discontinuing the operation and maintenance of
any of its properties, if such discontinuance is (i) in the ordinary course of
business pursuant to customary business terms or (ii) in the good faith judgment
of the respective Boards of Directors or other governing body of the Company or
Restricted Subsidiary, as the case may be, desirable in the conduct of their
respective businesses and is not disadvantageous in any material respect to the
Holders.
(b) The Company shall provide or cause to be provided, for itself and each
of the Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the good faith judgment of the
Company, are adequate and appropriate for the conduct of the business of the
Company and its Restricted Subsidiaries in a prudent manner, with reputable
insurers or with the government of the United States of America, Canada or an
agency or
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instrumentality thereof, in such amounts, with such deductibles, and by
such methods as shall be customary, in the good faith judgment of the Company,
for companies similarly situated in the industry.
SECTION 4.06. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, within 105 days after the end
of each of its fiscal quarters and fiscal years, an Officers' Certificate of the
Company (provided, however, that one of the signatories to each such Officers'
Certificate must state that he or she is the Company's principal executive
officer, principal financial officer or principal accounting officer), as to
such Officers' knowledge, without independent investigation, of the Company's
compliance with all conditions and covenants under this Indenture (without
regard to any period of grace or requirement of notice provided hereunder) and
in the event any Default of the Company exists, such Officers shall specify the
nature of such Default. Each such Officers' Certificate shall also notify the
Trustee should the Company elect to change the manner in which it fixes its
fiscal year end.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.08 shall be accompanied by a written
report of the Company's independent certified public accountants (who shall be a
firm of established national reputation) stating (A) that their audit
examination has included a review of the terms of this Indenture and the form of
the Notes as they relate to accounting matters, and (B) whether, in connection
with their audit examination, any Default or Event of Default has come to their
attention and if such a Default or Event of Default has come to their attention,
specifying the nature and period of existence thereof; provided, however, that,
without any restriction as to the scope of the audit examination, such
independent certified public accountants shall not be liable by reason of any
failure to obtain knowledge of any such Default or Event of Default that would
not be disclosed in the course of an audit examination conducted in accordance
with generally accepted auditing standards.
(c) (i) If any Default or Event of Default has occurred and is continuing
or (ii) if any Holder seeks to exercise any remedy hereunder with respect to a
claimed Default under this Indenture or the Notes, the Company shall deliver to
the Trustee, at its address set forth in Section 11.02 hereof, by registered or
certified mail or by facsimile transmission followed by hard copy by registered
or certified mail an Officers' Certificate specifying such event, notice or
other action within 10 days of its becoming aware of such occurrence.
SECTION 4.07. Compliance with Laws.
The Company shall comply, and shall cause each of its Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as could not singly or in the
aggregate reasonably be expected to have a material adverse effect on the
financial condition or results of operations of the Company and its Restricted
Subsidiaries taken as a whole.
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SECTION 4.08. Reports to Holders.
The Company will deliver to the Trustee within 15 days after filing of the
same with the Commission, copies of the quarterly and annual reports and of the
information, documents and other reports, if any, which the Company is required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company will file
with the Commission, to the extent permitted, and provide the Trustee and
Holders with such annual reports and such information, documents and other
reports specified in Sections 13 and 15(d) of the Exchange Act. The Company will
also comply with the other provisions of Section 314(a) of the TIA.
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that they 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 or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of 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 they may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and 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 4.10. Limitation on Restricted Payments.
The Company will not, and will not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any distribution (other than
dividends or distributions made to the Company or any Restricted Subsidiary and
other than any dividends or distributions payable solely in Qualified Capital
Stock of the Company) on or in respect of shares of the Capital Stock of the
Company or any Restricted Subsidiary to holders of such Capital Stock;
(2) purchase, redeem or otherwise acquire or retire for value any Capital
Stock of the Company or any Restricted Subsidiary other than through the
exchange therefor solely of Qualified Capital Stock of the Company;
(3) make any principal payment on, purchase, defease, redeem, prepay,
decrease or otherwise acquire or retire for value, prior to any scheduled final
maturity, scheduled repayment or scheduled sinking fund payment, any
Indebtedness of the Company or a Subsidiary Guarantor that is subordinate or
junior in right of payment to the Notes or such Subsidiary Guarantor's
Guarantee, as the case may be; or
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(4) make any Investment (other than a Permitted Investment) (each of the
foregoing actions set forth in clauses (1), (2), (3) and (4) being referred to
as a "Restricted Payment");
if at the time of such Restricted Payment or immediately after giving
effect thereto,
(i) a Default or an Event of Default shall have occurred and be continuing;
(ii) the Company is not able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section
4.12; or
(iii) the aggregate amount of Restricted Payments (including such proposed
Restricted Payment) made on or after January 1, 2002 (the amount expended for
such purposes, if other than in cash, being the fair market value of such
property as determined reasonably and in good faith by the Board of Directors of
the Company) shall exceed the sum of:
(u) $25.0 million; plus
(v) 50% of the cumulative Consolidated Net Income (or if cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company
earned on or after January 1, 2002 and on or prior to the last date of the
Company's fiscal quarter immediately preceding such Restricted Payment (the
"Reference Date") (treating such period as a single accounting period); plus
(w) 100% of the aggregate net cash proceeds, or the fair market value of
Property other than cash, received by the Company from any Person (other than a
Restricted Subsidiary of the Company) from the issuance and sale on or after
January 1, 2002 and on or prior to the Reference Date of Qualified Capital Stock
of the Company; plus
(x) without duplication of any amounts included in clause (iii)(w) above,
100% of the aggregate net cash proceeds of any equity contribution received by
the Company from a holder of the Company's Capital Stock (excluding, in the case
of clauses (iii)(w) and (x), any net cash proceeds from an Equity Offering to
the extent used to redeem the Notes); plus
(y) an amount equal to the net reduction in Investments in Unrestricted
Subsidiaries resulting from dividends, interest payments, repayments of loans or
advances, or other transfers of cash or Properties (including transfers as a
result of a merger or liquidation), in each case to the Company or to any
Restricted Subsidiary of the Company from Unrestricted Subsidiaries (but without
duplication of any such amount included in calculating cumulative Consolidated
Net Income of the Company), or from redesignations of Unrestricted Subsidiaries
as Restricted Subsidiaries (in each case valued as
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provided in Section 4.14), not to exceed, in the case of any Unrestricted
Subsidiary, the amount of Investments previously made by the Company or any
Restricted Subsidiary in such Unrestricted Subsidiary and which was treated as a
Restricted Payment hereunder; plus
(z) without duplication of the immediately preceding subclause (y), an
amount equal to the lesser of the cost or net cash proceeds received upon the
sale or other disposition of any Investment made on or after January 1, 2002
which had been treated as a Restricted Payment (but without duplication of any
such amount included in calculating cumulative Consolidated Net Income of the
Company).
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph shall not prohibit:
(1) the payment of any dividend or redemption payment within 60 days after
the date of declaration of such dividend or the applicable redemption if the
dividend or redemption payment, as the case may be, would have been permitted on
the date of declaration;
(2) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any Capital Stock of the Company, either (i)
solely in exchange for Qualified Capital Stock of the Company or (ii) through
the application of net proceeds of a sale for cash (other than to a Restricted
Subsidiary of the Company) of Qualified Capital Stock of the Company within 90
days before or within 5 days after such acquisition;
(3) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any Indebtedness of the Company or Subsidiary
Guarantor that is subordinate or junior in right of payment to the Notes or such
Subsidiary Guarantor's Guarantee, as the case may be, either (i) solely in
exchange for Qualified Capital Stock of the Company, or (ii) through the
application of net proceeds of a substantially concurrent sale for cash (other
than to a Restricted Subsidiary of the Company) of (a) Qualified Capital Stock
of the Company or (b) Refinancing Indebtedness;
(4) if no Default or Event of Default shall have occurred and be
continuing, the payment of dividends on the TCW Preferred Stock; and
(5) the initial designation of Xxxxxx Xxxxxxx International Limited
Liability Company, Canvasback Energy, Inc. and Redhead Energy, Inc. as
Unrestricted Subsidiaries (such designation shall be deemed to have occurred on
December 31, 2001).
In determining the aggregate amount of Restricted Payments made on or after
January 1, 2002 in accordance with clause (iii) of the immediately preceding
paragraph, amounts expended pursuant to clauses (1), (2), (3) and (4) shall be
included in such calculation.
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SECTION 4.11. Limitations on Transactions with Affiliates.
The Company will not, and will not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into, amend or permit or suffer
to exist any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease or exchange of any property, the
guaranteeing of any Indebtedness or the rendering of any service) with, or for
the benefit of, any of their respective Affiliates (each an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under the third
paragraph of this Section 4.11 and (y) Affiliate Transactions that are on terms
that are fair and reasonable to the Company or the applicable Restricted
Subsidiary and are no less favorable to the Company or the applicable Restricted
Subsidiary than those that might reasonably have been obtained in a comparable
transaction at such time on an arm's-length basis from a Person that is not an
Affiliate of the Company or such Restricted Subsidiary.
All Affiliate Transactions (and each series of related Affiliate
Transactions which are similar or part of a common plan) involving aggregate
payments or other property with a fair market value in excess of $5.0 million
shall be approved by the Board of Directors of the Company, such approval to be
evidenced by a Board Resolution stating that such Board of Directors has
determined that such transaction complies with the foregoing provisions. If the
Company or any Restricted Subsidiary enters into an Affiliate Transaction (or a
series of related Affiliate Transactions related to a common plan) that involves
an aggregate fair market value of more than $15.0 million, the Company shall,
prior to the consummation thereof, obtain a favorable opinion as to the fairness
of such transaction or series of related transactions to the Company or the
relevant Restricted Subsidiary, as the case may be, from a financial point of
view, from an Independent Advisor and file the same with the Trustee.
The requirements set forth in the first and second paragraphs of this
Section 4.11 shall not apply to:
(1) reasonable fees and compensation paid to and indemnity provided on
behalf of, officers, directors, employees or consultants of the Company or any
Restricted Subsidiary as determined in good faith by the Board of Directors or
senior management of the Company or such Restricted Subsidiary, as the case may
be;
(2) transactions exclusively between or among the Company and any of its
Restricted Subsidiaries or exclusively between or among such Restricted
Subsidiaries; provided, however, that such transactions are not otherwise
prohibited hereunder; and
(3) Restricted Payments permitted hereunder.
SECTION 4.12. Limitation on Incurrence of Additional Indebtedness.
Other than Permitted Indebtedness, the Company will not, and will not cause
or permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume, guarantee, acquire, become liable, contingently or otherwise,
with respect to, or otherwise become responsible for payment of (collectively,
"incur") any Indebtedness (including, without limitation, Acquired
Indebtedness); provided, however, that if no Default or Event of Default shall
have occurred and be
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continuing at the time of or as a consequence of the incurrence of any such
Indebtedness, the Company and the Restricted Subsidiaries or any of them may
incur Indebtedness, in each case, if on the date of the incurrence of such
Indebtedness, after giving pro forma effect to the incurrence thereof and the
receipt and application of the proceeds therefrom, the Company's Consolidated
EBITDA Coverage Ratio would have been greater than 2.50 to 1.0.
For purposes of determining any particular amount of Indebtedness under
this Section 4.12, guarantees of Indebtedness otherwise included in the
determination of such amount shall not also be included.
Indebtedness of a Person existing at the time such Person becomes a
Restricted Subsidiary (whether by merger, consolidation, acquisition of Capital
Stock or otherwise) or is merged with or into the Company or any Restricted
Subsidiary or which is secured by a Lien on an asset acquired by the Company or
a Restricted Subsidiary (whether or not such Indebtedness is assumed by the
acquiring Person) shall be deemed incurred at the time the Person becomes a
Restricted Subsidiary or at the time of the asset acquisition, as the case may
be.
The Company will not, and will not permit any Subsidiary Guarantor to,
incur any Indebtedness which by its terms (or by the terms of any agreement
governing such Indebtedness) is subordinated in right of payment to any
Indebtedness of the Company or such Subsidiary Guarantor, as the case may be,
other than the Notes and the Guarantees unless such Indebtedness is also by its
terms (or by the terms of any agreement governing such Indebtedness) made
expressly subordinate in right of payment to the Notes or the Guarantee of such
Subsidiary Guarantor, as the case may be, pursuant to subordination provisions
that are at least as favorable to the holders of the Notes or such guarantee as
the subordination provisions of such Indebtedness (or agreement).
SECTION 4.13. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.
The Company will not, and will not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on or in respect of its
Capital Stock;
(2) make loans or advances, or to pay any Indebtedness or other obligation
owed, to the Company or any other Restricted Subsidiary;
(3) guarantee any Indebtedness or any other obligation of the Company or
any Restricted Subsidiary; or
(4) transfer any of its property or assets to the Company or any other
Restricted Subsidiary (each such encumbrance or restriction, a "Payment
Restriction"),
except for such encumbrances or restrictions existing under or by reason
of:
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(a) applicable law;
(b) this Indenture or any other indentures governing Pari Passu
Indebtedness; provided, however, that the provisions relating to such
encumbrances or restriction contained in any such other indenture are no less
favorable to the Holders in any material respect as determined by the Board of
Directors of the Company in their reasonable and good faith judgment than the
provisions relating to such encumbrances or restrictions contained in the
Indenture;
(c) the Senior Credit Facility;
(d) customary non-assignment provisions of any contract or any lease
governing a leasehold interest of any Restricted Subsidiary;
(e) any instrument governing Acquired Indebtedness, which encumbrance or
restriction is not applicable to such Restricted Subsidiary, or the properties
or assets of such Restricted Subsidiary, other than the Person or the properties
or assets of the Person so acquired;
(f) agreements existing on the Issue Date to the extent and in the manner
such agreements are in effect on the Issue Date;
(g) customary restrictions with respect to a Restricted Subsidiary of the
Company pursuant to an agreement that has been entered into for the sale or
disposition of Capital Stock or assets of such Restricted Subsidiary to be
consummated in accordance with the terms of the Indenture solely in respect of
the assets or Capital Stock to be sold or disposed of;
(h) any instrument governing a Permitted Lien, to the extent and only to
the extent such instrument restricts the transfer or other disposition of assets
subject to such Permitted Lien; or
(i) an agreement governing Refinancing Indebtedness incurred to Refinance
the Indebtedness issued, assumed or incurred pursuant to an agreement referred
to in clause (b), (c), (e) or (f) above; provided, however, that the provisions
relating to such encumbrance or restriction contained in any such Refinancing
Indebtedness are no less favorable to the Holders in any material respect as
determined by the Board of Directors of the Company in their reasonable and good
faith judgment than the provisions relating to such encumbrance or restriction
contained in the applicable agreement referred to in such clause (b), (c), (e)
or (f).
SECTION 4.14. Limitation on Restricted and Unrestricted Subsidiaries.
As the Company or any of its Subsidiaries forms or acquires Subsidiaries,
each newly formed or acquired Subsidiary shall be designated by the Company's
Board of Directors as a Restricted Subsidiary or an Unrestricted Subsidiary,
provided that (1) any Subsidiary of any already existing Unrestricted Subsidiary
shall be (and shall be deemed designated as) an Unrestricted Subsidiary, (2)
subject to the foregoing clause (1), any designation of an Unrestricted
Subsidiary shall be effective only if the Investment in that Subsidiary is made
in compliance with Section 4.10 and (3) subject to the foregoing clause (1), any
failure by the Company's Board of Directors to
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affirmatively make such a designation of a Subsidiary shall be deemed a
designation (in compliance with the Indenture) of such Subsidiary as a
Restricted Subsidiary.
After a Subsidiary of the Company has been designated as an Unrestricted
Subsidiary, the Board of Directors of the Company may, if no Default or Event of
Default would arise therefrom, redesignate such Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that:
(1) any such redesignation shall be deemed to be an incurrence as of the
date of such redesignation by the Company and its Restricted Subsidiaries of the
Indebtedness (if any) of such redesignated Subsidiary for purposes of Section
4.10;
(2) unless such redesignated Subsidiary shall not have any Indebtedness
outstanding, other than Indebtedness which would be Permitted Indebtedness, no
such designation shall be permitted if immediately after giving effect to such
redesignation and the incurrence of any such additional Indebtedness the Company
could not incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.12; and
(3) such Subsidiary assumes by execution of a supplemental indenture all of
the obligations of a Subsidiary Guarantor under a Guarantee.
After a Subsidiary of the Company has been designated as a Restricted
Subsidiary, the Board of Directors of the Company also may, if no Default or
Event of Default would arise therefrom, redesignate such Restricted Subsidiary
to be an Unrestricted Subsidiary if such redesignation is at that time permitted
under Section 4.10. Upon any such permitted redesignation, such Restricted
Subsidiary's Guarantee will be released.
Any such designation or redesignation of an Unrestricted Subsidiary by the
Board of Directors shall be evidenced to the Trustee by the filing with the
Trustee of a certified copy of the resolution of the Board of Directors giving
effect to such designation or redesignation and an Officers' Certificate
certifying that such designation or redesignation complied with the foregoing
conditions and setting forth in reasonable detail the underlying calculations.
For purposes of Section 4.10:
(1) an "Investment" shall be deemed to have been made at the time any
Restricted Subsidiary is designated as an Unrestricted Subsidiary in an amount
(proportionate to the Company's equity interest in such Subsidiary) equal to the
net worth of such Restricted Subsidiary at the time that such Restricted
Subsidiary is designated as an Unrestricted Subsidiary ("net worth" to be
calculated based upon the fair market value of the assets of such Subsidiary as
of any such date of designation); and
(2) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its fair market value at the time of such transfer.
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Notwithstanding the foregoing, the Board of Directors may not designate or
redesignate any Subsidiary of the Company to be an Unrestricted Subsidiary if,
after such designation or redesignation:
(1) the Company or any Restricted Subsidiary:
(a) provides credit support for, or a guarantee of, any Indebtedness of
such Subsidiary (including any undertaking, agreement or instrument evidencing
such Indebtedness); or
(b) is directly or indirectly liable for any Indebtedness of such
Subsidiary; or
(2) such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, any Restricted Subsidiary which is not a Subsidiary of the
Subsidiary to be so designated.
SECTION 4.15. Change of Control.
Upon the occurrence of a Change of Control, each Holder will have the right
to require that the Company purchase all or a portion of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer"), at a
purchase price equal to 101% of the principal amount thereof, plus accrued
interest, if any, thereon to the date of purchase.
Within 30 days following the date upon which the Change of Control
occurred, the Company must send, by first class mail, a notice to each Holder at
such Holder's last registered address, with a copy to the Trustee, which notice
shall govern the terms of the Change of Control Offer. The notice to the Holders
shall contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Change of Control Offer. Such notice shall state
that:
(a) the Change of Control Offer is being made pursuant to this Section
4.15;
(b) all Notes tendered and not withdrawn will be accepted for payment;
(c) the Change of Control Offer shall remain open for a period of 20
Business Days or such longer period as may be required by law;
(d) the purchase price (including the amount of accrued interest) and the
purchase date (which shall be not less than 30 nor more than 45 days following
the date such notice is mailed (other than may be required by law (the "Change
of Control Offer Payment Date");
(e) any Note not tendered will continue to accrue interest;
(f) unless the Company defaults in making payment therefor, any Note
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Offer Payment Date;
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(g) Holders electing to have a Note purchased pursuant to a Change of
Control Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, to
the Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day prior to the Change of Control Offer Payment
Date;
(h) Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the second Business Day prior to the Change of Control
Offer Payment Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Notes the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Note purchased;
(i) Holders whose Notes are purchased only in part will be issued new Notes
in a principal amount equal to the unpurchased portion of the Notes surrendered;
provided, however, that each Note purchased and each new Note issued shall be in
an original principal amount of $1,000 or integral multiples thereof; and
(j) the circumstances and relevant facts regarding such Change of Control.
On or before the Change of Control Offer Payment Date, the Company shall
(a) accept for payment Notes or portions thereof tendered pursuant to the Change
of Control Offer, (b) deposit with the Paying Agent in accordance with Section
2.14 U.S. Legal Tender sufficient to pay the purchase price plus accrued
interest, if any, of all Notes so tendered to be purchased and (c) deliver to
the Trustee Notes so accepted together with an Officers' Certificate stating the
Notes or portions thereof being purchased by the Company. Upon receipt by the
Paying Agent of the monies specified in clause (ii) above and a copy of the
Officer's Certificate specified in clause (iii) above, the Paying Agent shall
promptly mail to the Holders of Notes so accepted payment in an amount equal to
the purchase price plus accrued interest, if any, and the Trustee shall promptly
authenticate and mail to such Holders new Notes equal in principal amount to any
unpurchased portion of the Notes surrendered. Any Notes not so accepted shall be
promptly mailed by the Company to the Holder thereof. For purposes of this
Section 4.15, the Trustee shall act as the Paying Agent.
Neither the Board of Directors of the Company nor the Trustee may waive the
provisions of this Section 4.15 relating to the Company's obligation to make a
Change of Control Offer.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.15, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.15 by virtue thereof.
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SECTION 4.16. Limitation on Asset Sales.
The Company will not, and will not cause or permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company or the applicable 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 assets sold or otherwise disposed of (as determined in
good faith by the Company's Board of Directors or senior management of the
Company);
(2) at least 75% of the consideration received by the Company or such
Restricted Subsidiary, as the case may be, from such Asset Sale shall be in the
form of cash or Cash Equivalents and is received at the time of such
disposition; and
(3) upon the consummation of an Asset Sale, the Company shall apply, or
cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to
such Asset Sale within 360 days of receipt thereof either:
(a) to repay or prepay Indebtedness outstanding under the Senior Credit
Facility and, if that Indebtedness is revolving credit Indebtedness, to
correspondingly reduce the funding commitment under the Senior Credit Facility
with respect to the revolving credit Indebtedness repaid or prepaid;
(b) to repay or prepay any Indebtedness of the Company that is secured by a
Lien permitted to be incurred pursuant to Section 4.18;
(c) to make an investment in properties or assets that replace the
properties or assets that were the subject of such Asset Sale or in properties
or assets that will be used in the business of the Company and its Restricted
Subsidiaries as existing on the Issue Date or in businesses reasonably related
thereto ("Replacement Assets");
(d) to make an investment in Crude Oil and Natural Gas Related Assets;
(e) to repurchase the Company's 10% Senior Notes due 2007 pursuant to a net
proceeds offer similar to the Net Proceeds Offer described below; or
(f) to make a combination of prepayment and investment permitted by the
foregoing clauses (3)(a) through (3)(e).
On the 361st day after an Asset Sale or such earlier date, if any, as the
Board of Directors of the Company determines not to apply the Net Cash Proceeds
relating to such Asset Sale as set forth in clauses (3)(a) through (3)(f) of the
immediately preceding paragraph (each a "Net Proceeds Offer Trigger Date"), such
aggregate amount of Net Cash Proceeds which have been received by the Company or
such Restricted Subsidiary but which have not been applied on or before such Net
Proceeds Offer Trigger Date as permitted in clauses (3)(a) through (3)(f) of the
immediately preceding paragraph (each a "Net Proceeds Offer Amount") shall be
applied by the Company or such
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Restricted Subsidiary, as the case may be, to make an offer to purchase (a
"Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less
than 30 nor more than 45 days following the applicable Net Proceeds Offer
Trigger Date, from all Holders and, to the extent required by the terms of any
Pari Passu Indebtedness the holders of such Pari Passu Indebtedness, on a pro
rata basis, that principal amount of Notes (and Pari Passu Indebtedness)
purchasable with the Net Proceeds Offer Amount at a price equal to 100% of the
principal amount of the Notes (and Pari Passu Indebtedness) to be purchased,
plus accrued and unpaid interest, if any, thereon to the date of purchase;
provided, however, that if at any time any non-cash consideration received by
the Company or any Restricted Subsidiary, as the case may be, in connection with
any Asset Sale is converted into or sold or otherwise disposed of for cash
(other than interest received with respect to any such non-cash consideration),
then such conversion or disposition shall be deemed to constitute an Asset Sale
hereunder and the Net Cash Proceeds thereof shall be applied in accordance with
this Section 4.16.
The Company may defer the Net Proceeds Offer until there is an aggregate
unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million
resulting from one or more Asset Sales (at which time, the entire unutilized Net
Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall
be applied as required pursuant to this paragraph).
Notwithstanding the first two paragraphs of this Section 4.16, the Company
and its Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with such paragraphs to the extent that:
(1) the consideration for such Asset Sale constitutes Replacement Assets
and/or Crude Oil and Natural Gas Related Assets and/or the assumption of
obligations secured by Liens that burden some or all of the assets being sold;
provided that, in the case of any such assumption, (a) the Person assuming such
obligations shall have no recourse with respect to such obligations to the
Company or any of its Restricted Subsidiaries and (b) no assets of the Company
or any of its Restricted Subsidiaries (other than those assets being sold) are
subject to such Liens; and
(2) such Asset Sale is for fair market value; provided, that at least 75%
of the total consideration received by the Company or any of its Restricted
Subsidiaries in connection with any such Asset Sale shall be in the form of
Replacement Assets, Crude Oil and Natural Gas Related Assets, the assumption of
Liens described in clause (1) above, cash or Cash Equivalents and that any Net
Cash Proceeds so received shall be subject to the provisions of clause (3) of
the first paragraph and to the provisions of the second paragraph of this
covenant.
Notice of each Net Proceeds Offer will be mailed to the record Holders as
shown on the register of Holders within 30 days following the Net Proceeds Offer
Trigger Date, with a copy to the Trustee, and shall comply with the procedures
set forth herein. Upon receiving notice of the Net Proceeds Offer, Holders may
elect to tender their Notes in whole or in part in integral multiples of $1,000
in exchange for cash. To the extent Holders properly tender Notes and holders of
Pari Passu Indebtedness property tender such Indebtedness with an aggregate
principal amount exceeding the Net Proceeds Offer Amount, Notes of tendering
Holders and Pari Passu Indebtedness will be purchased on
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a pro rata basis (based on principal amounts of Notes and Pari Passu
Indebtedness tendered). A Net Proceeds Offer shall remain open for a period of
20 Business Days or such longer period as may be required by law.
Each Net Proceeds Offer notice shall contain all instructions and materials
necessary to enable Holders to tender Notes pursuant to the Net Proceeds Offer
and shall state the following terms:
(i) that the Net Proceeds Offer is being made pursuant to Section 4.16,
that all Notes tendered will be accepted for payment; provided, however, that if
the aggregate principal amount of Notes tendered in a Net Proceeds Offer plus
accrued interest (together with the amount of Pari Passu Indebtedness properly
tendered) at the expiration of such offer exceeds the aggregate amount of the
Net Proceeds Offer, the Company shall select the Notes to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000 or multiples thereof shall be
purchased) and that the Net Proceeds Offer shall remain open for a period of 20
Business Days or such longer period as may be required by law;
(ii) the purchase price (including the amount of accrued interest) and the
Net Proceeds Offer Payment Date (which shall be not less than 30 nor more than
45 days following the applicable Net Proceeds Offer Trigger Date and which shall
be at least five Business Days after the Trustee receives notice thereof from
the Company);
(iii) that any Note not tendered will continue to accrue interest;
(iv) that, unless the Company defaults in making payment therefor, any Note
accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue
interest after the Net Proceeds Offer Payment Date;
(v) that Holders electing to have a Note purchased pursuant to a Net
Proceeds Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, to
the Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day prior to the Net Proceeds Offer Payment Date;
(vi) that Holders will be entitled to withdraw their election if the Paying
Agent receives, not later than the second Business Day prior to the Net Proceeds
Offer Payment Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Notes the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Note purchased; and
(vii) that Holders whose Notes are purchased only in part will be issued
new Notes in a principal amount equal to the unpurchased portion of the Notes
surrendered; provided, however, that each Note purchased and each new Note
issued shall be in an original principal amount of $1,000 or integral multiples
thereof.
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On or before the Net Proceeds Offer Payment Date, the Company shall (a)
accept for payment Notes or portions thereof tendered pursuant to the Net
Proceeds Offer which are to be purchased in accordance with item (i) above, (b)
deposit with the Paying Agent in accordance with Section 2.14 U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all Notes
to be purchased and (c) deliver an Officers' Certificate stating the Notes or
portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to the Holders of Notes so accepted payment in an amount equal to the
purchase price plus accrued interest, if any. For purposes of this Section 4.16,
the Trustee shall act as the Paying Agent.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with this Section
4.16, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.16 by virtue thereof.
SECTION 4.17. Limitation on Preferred Stock of Restricted Subsidiaries.
The Company will not cause or permit any of its Restricted Subsidiaries to
issue any Preferred Stock of any Restricted Subsidiary (other than to the
Company or to a Restricted Subsidiary) or permit any Person (other than the
Company or a Restricted Subsidiary) to own any Preferred Stock of any Restricted
Subsidiary.
SECTION 4.18. Limitation on Liens.
Other than Permitted Liens, the Company will not, and will not cause or
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or permit or suffer to exist any Liens of any kind against or upon
any property or assets of the Company or any of its Restricted Subsidiaries
(whether owned on the Issue Date or acquired after the Issue Date) unless:
(1) in the case of Liens securing Indebtedness that is expressly
subordinate or junior in right of payment to the Notes or any Guarantee, the
Notes or such Guarantee, as the case may be, are secured by a Lien on such
property, assets or proceeds that is senior in priority to such Liens at least
to the same extent as the Notes are senior in priority to such Indebtedness; and
(2) in all other cases, the Notes and the Guarantees are equally and
ratably secured.
SECTION 4.19. Limitation on Conduct of Business.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in the conduct of any material business other than the
Crude Oil and Natural Gas Business.
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SECTION 4.20. Additional Subsidiary Guarantees.
If any of the Company's Restricted Subsidiaries that is not a Subsidiary
Guarantor is a guarantor of Pari Passu Indebtedness or of the Company's 10%
Senior Notes due 2007, then the Company shall cause such Restricted Subsidiary
to become a Subsidiary Guarantor. If the Company or any of its Restricted
Subsidiaries transfers or causes to be transferred, in one transaction or a
series of related transactions, any property to any Restricted Subsidiary that
is not a Subsidiary Guarantor, or if the Company or any of its Restricted
Subsidiaries shall organize, acquire or otherwise invest in or hold an
Investment in another Restricted Subsidiary, that caused the total consolidated
assets owned by all Restricted Subsidiaries that are not Subsidiary Guarantors
to exceed in the aggregate 2% of the total consolidated assets of the Company,
then the Company shall cause one or more of such transferees or acquired or
other Restricted Subsidiaries to become Subsidiary Guarantors to the extent
necessary to cause the total consolidated assets owned by all Restricted
Subsidiaries that are not Subsidiary Guarantors not to exceed in the aggregate
2% of the total consolidated assets of the Company. If required to become a
Subsidiary Guarantor pursuant to either of the immediately preceding sentences,
such transferee or acquired or other Restricted Subsidiary shall:
(1) execute and deliver to the Trustee a supplemental indenture in form
reasonably satisfactory to the Trustee pursuant to which such Restricted
Subsidiary shall unconditionally guarantee all of the Company's obligations
under the Notes and the Indenture on the terms set forth in this Indenture; and
(2) deliver to the Trustee an Opinion of Counsel that such supplemental
indenture has been duly authorized, executed and delivered by such Restricted
Subsidiary and constitutes a legal, valid, binding and enforceable obligation of
such Restricted Subsidiary. Thereafter, such Restricted Subsidiary shall be a
Subsidiary Guarantor for all purposes of the Indenture.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets.
The Company will not, in a single transaction or series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary to sell, assign, transfer, lease, convey or otherwise
dispose of) all or substantially all of the Company's assets (determined on a
consolidated basis for the Company and its Restricted Subsidiaries), whether as
an entirety or substantially as an entirety to any Person unless:
(a) either:
(1) the Company shall be the surviving or continuing corporation; or
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(2) the Person (if other than the Company) formed by such consolidation or
into which the Company is merged or the Person which acquires by sale,
assignment, transfer, lease, conveyance or other disposition the properties and
assets of the Company and its Restricted Subsidiaries substantially as an
entirety (the "Surviving Entity"):
(x) shall be a corporation organized and validly existing under the laws of
the United States or any state thereof or the District of Columbia; and
(y) shall expressly assume, by supplemental indenture (in form and
substance satisfactory to the Trustee), executed and delivered to the Trustee,
the due and punctual payment of the principal of, premium, if any, and interest
on all of the Notes and the performance of every covenant of the Notes, this
Indenture and the Registration Rights Agreement on the part of the Company to be
performed or observed;
(b) immediately after giving effect to such transaction and the assumption
contemplated by clause (a)(2)(y) above (including giving effect to any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction), the Company or such Surviving Entity, as the case
may be, shall be able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to Section 4.12 hereof;
(c) immediately after giving effect to such transaction and the assumption
contemplated by clause (a)(2)(y) above (including, without limitation, giving
effect to any Indebtedness incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction), no Default or
Event of Default shall have occurred or be continuing; and
(d) the Company or the Surviving Entity, as the case may be, shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture complies with the
applicable provisions of this Indenture and that all conditions precedent in
this Indenture relating to such transaction have been satisfied; provided,
however, that such counsel may rely, as to matters of fact, on a certificate or
certificates of officers of the Company.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries the Capital Stock of which constitutes all or substantially all of
the properties and assets of the Company, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.
Each Subsidiary Guarantor (other than any Subsidiary Guarantor whose
Guarantee is to be released in accordance with the terms of the Guarantee and
this Indenture in connection with any transaction complying with the provisions
of the Indenture described under Article 5 will not, and the Company will not
cause or permit any Subsidiary Guarantor to, consolidate with or merge with or
into any Person other than the Company or another Subsidiary Guarantor that is a
Restricted Subsidiary unless:
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(1) the entity formed by or surviving any such consolidation or merger (if
other than the Subsidiary Guarantor) or to which such sale, lease, conveyance or
other disposition shall have been made is a corporation or other legal entity
organized and existing under the laws of the United States or any state thereof
or the District of Columbia;
(2) such entity assumes by execution of a supplemental indenture all of the
obligations of the Subsidiary Guarantor under its Guarantee;
(3) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; and
(4) immediately after giving effect to such transaction and the use of any
net proceeds therefrom on a pro forma basis, the Company could satisfy the
provisions of clause (b) of the first paragraph of this Section 5.01.
Any merger or consolidation of a Subsidiary Guarantor with and into the
Company (with the Company being the surviving entity) or another Subsidiary
Guarantor that is a Restricted Subsidiary need only comply with clause (d) of
the first paragraph of this Section 5.01.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.01,
in which the Company is not the continuing corporation, the successor Person
formed by such consolidation or into which the Company is merged or to which
such conveyance, lease or transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
and the Notes with the same effect as if such surviving entity had been named as
such.
ARTICLE SIX
REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" means any of the following events:
(a) the failure to pay interest (including any Additional Interest) on any
Notes when the same becomes due and payable and such default continues for a
period of 30 days;
(b) the failure to pay the principal of any Notes when such principal
becomes due and payable, at maturity, upon redemption or otherwise (including
the failure to make a payment to purchase Notes tendered pursuant to a Change of
Control Offer or a Net Proceeds Offer);
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(c) a default in the observance or performance of any other covenant or
agreement contained in this Indenture which default continues for a period of 30
days after the Company receives written notice specifying the default (and
demanding that such default be remedied) from the Trustee or the Holders of at
least 25% of the outstanding principal amount of the Notes (except in the case
of a default with respect to observance or performance of any of the terms or
provisions of Section 4.15, 4.16 or 5.01 which will constitute an Event of
Default with such notice requirement but without such passage of time
requirement);
(d) a default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness of
the Company or any Restricted Subsidiary (or the payment of which is guaranteed
by the Company or any Restricted Subsidiary), whether such Indebtedness now
exists, or is created after the Issue Date, which default (i) is caused by a
failure to pay principal of or premium, if any, or interest on such Indebtedness
after any applicable grace period provided in such Indebtedness on the date of
such default (a "Payment Default") or (ii) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $10.0 million or more;
(e) one or more judgments in an aggregate amount in excess of $10.0 million
(unless covered by insurance by a reputable insurer as to which the insurer has
not disclaimed coverage) shall have been rendered against the Company or any of
its Restricted Subsidiaries and such judgments remain undischarged, unpaid and
unstayed for a period of 60 days after such judgment or judgments become final
and non-appealable;
(f) the Company or any of its Significant Subsidiaries pursuant to or under
or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief against it in an
involuntary case or proceeding;
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property;
(iv) makes a general assignment for the benefit of its creditors; or
(v) shall generally not pay its debts when such debts become due or shall
admit in writing its inability to pay its debts generally;
(g) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
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(i) is for relief against the Company or any Significant Subsidiary of the
Company in an involuntary case or proceeding;
(ii) appoints a Custodian of the Company or any Significant Subsidiary of
the Company for all or substantially all of its Properties; or
(iii) orders the liquidation of the Company or any Significant Subsidiary
of the Company;
and in each case the order or decree remains unstayed and in effect for 60
days; or
(h) any of the Guarantees cease to be in full force and effect or any of
the Guarantees are declared to be null and void or invalid and unenforceable or
any of the Subsidiary Guarantors denies or disaffirms its liability under its
Guarantees (other than by reason of release of a Subsidiary Guarantor in
accordance with the terms of this Indenture).
SECTION 6.02. Acceleration.
Upon the happening of an Event of Default specified in Section 6.01 (other
than an Event of Default specified in clauses (f) or (g) of Section 6.01
relating to the Company) the Trustee may, or the holders of at least 25% in
principal amount of outstanding Notes may, declare the principal of, premium, if
any, and accrued and unpaid interest on all the Notes to be due and payable by
notice in writing to the Company and the Trustee specifying the respective Event
of Default and that it is a "notice of acceleration" and the same shall become
immediately due and payable. If an Event of Default of the type described in
clauses (f) or (g) above relating to the Company occurs and is continuing, then
all unpaid principal of, and premium, if any, and accrued and unpaid interest on
all of the outstanding Notes shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.
At any time after a declaration of acceleration with respect to the Notes
as described in the preceding paragraph, the Holders of a majority in aggregate
principal amount of the Notes then outstanding by written notice to the Company
and the Trustee may rescind and cancel such declaration and its consequences (a)
if the rescission would not conflict with any judgment or decree, (b) if all
existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of such acceleration,
(c) to the extent the payment of such interest is lawful, interest on overdue
installments of interest and overdue principal, which has become due otherwise
than by such declaration of acceleration, has been paid, (d) if the Company has
paid the Trustee its reasonable compensation and reimbursed the Trustee for its
expenses, disbursements and advances and (e) in the event of the cure or waiver
of an Event of Default of the type described in clauses (f) or (g) of the
description of Events of Default above, the Trustee shall have received an
Officers' Certificate and an Opinion of Counsel that such Event of Default has
been cured or waived; provided, however, that such counsel may rely, as to
matters of fact, on a certificate or certificates of officers of the Company. No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.
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SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of the
principal of, premium, if any, or interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
All rights of action and claims under this Indenture or the Notes may be
enforced by the Trustee even if it does not possess any of the Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or any
Holder in exercising any right or remedy accruing upon an Event of Default shall
not impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
At any time prior to the declaration of acceleration of the Notes, the
Holders of not less than a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may, on behalf of the Holders of all
the Notes, waive any existing Default or Event of Default and its consequences
under this Indenture, except a Default or Event of Default specified in Section
6.01(a) or (b) or in respect of any provision hereof which cannot be modified or
amended without the consent of the Holder so affected pursuant to Section 9.02.
When a Default or Event of Default is so waived, it shall be deemed cured and
shall cease to exist. This Section 6.04 shall be in lieu of ss. 316(a)(1)(B) of
the TIA and such ss. 316(a)(1)(B) of the TIA is hereby expressly excluded from
this Indenture and the Notes, as permitted by the TIA.
SECTION 6.05. Control by Majority.
Holders of the Notes may not enforce this Indenture or the Notes except as
provided in this Article Six and under the TIA. The Holders of not less than a
majority in aggregate 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, or exercising any trust or power conferred on
the Trustee, provided, however, that the Trustee may refuse to follow any
direction (a) that conflicts with any rule of law or this Indenture, (b) that
the Trustee determines may be unduly prejudicial to the rights of another
Holder, or (c) that may expose the Trustee to personal liability for which
reasonable indemnity provided to the Trustee against such liability shall be
deemed inadequate by the Trustee; provided, further, however, that the Trustee
may take any other action deemed proper by the Trustee that is not inconsistent
with such direction or this Indenture. This Section 6.05 shall be in lieu of ss.
316(a)(1)(A) of the TIA, and such ss. 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Notes, as permitted by the TIA.
SECTION 6.06. Limitation on Suits.
No Holder of any Notes shall have any right to institute any proceeding
with respect to this Indenture or the Notes or any remedy hereunder, unless the
Holders of at least 25% in aggregate principal amount of the outstanding Notes
have made written request, and offered indemnity,
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satisfactory to the Trustee to institute such proceeding as Trustee under
the Notes and this Indenture, the Trustee has failed to institute such
proceeding within 30 days after receipt of such notice, request and offer of
indemnity and the Trustee, within such 30-day period, has not received
directions inconsistent with such written request by Holders of not less than a
majority in aggregate principal amount of the outstanding Notes.
The foregoing limitations shall not apply to a suit instituted by a Holder
of a Note for the enforcement of the payment of the principal of, premium, if
any, or interest on, such Note on or after the respective due dates expressed or
provided for in such Note.
A Holder may not use this Indenture to prejudice the rights of any other
Holders or to obtain priority or preference over such other Holders.
SECTION 6.07. Right of Holders To Receive Payment.
Notwithstanding any other provision in this Indenture, the right of any
Holder of a Note to receive payment of the principal of, premium, if any, and
interest on such Note, on or after the respective due dates expressed or
provided for in such Note, or to bring suit for the enforcement of any such
payment on or after the respective due dates, is absolute and unconditional and
shall not be impaired or affected without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default specified in clause (a) or (b) of Section 6.01
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company, or any other obligor on the
Notes for the whole amount of the principal of, premium, if any, and accrued
interest remaining unpaid, together with interest on overdue principal and, to
the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum provided for by the
Notes and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents, counsel, accountants and experts) and
the Holders allowed in any judicial proceedings relative to the Company or
Restricted Subsidiaries (or any other obligor upon the Notes), their creditors
or their property and shall be entitled and empowered to collect and receive any
monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.07.
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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 6.10. Priorities.
If the Trustee collects any money pursuant to this Article Six it shall pay
out such money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for interest accrued on the Notes, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for interest;
Third: to Holders for the principal amounts (including any premium) owing
under the Notes, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for the principal (including any
premium); and
Fourth: the balance, if any, to the Company.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court may in its discretion require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to any suit by the Trustee, any suit by a Holder pursuant to
Section 6.07, or a suit by a Holder or Holders of more than 10% in aggregate
principal amount of the outstanding Notes.
SECTION 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture or any Note 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 the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
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ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee may
exercise such of the rights and powers vested in it by this Indenture and shall
use the same degree of care and skill in its exercise thereof as a prudent
person would exercise or use under the circumstances in the conduct of his own
affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no covenants or obligations shall be implied in this
Indenture that are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, in the case of any
such certificates or opinions that by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the Trustee
may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer, unless it is conclusively determined by a court of
competent jurisdiction that the Trustee was negligent in ascertaining the
pertinent facts.
(3) The Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.02, 6.04 or 6.05.
(d) No provision of this Indenture shall require the Trustee to 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.
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(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01 and
Section 7.02.
(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any document believed by it to be genuine
and to have been signed or presented by the proper Person or Persons. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel of its selection and may require an Officers' Certificate or an Opinion
of Counsel, which shall conform to Sections 11.04 and 11.05. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such advice or such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through attorneys, agents, custodians or nominees
and shall not be responsible for the misconduct or negligence of any attorney,
agent, custodian or nominee appointed with due care.
(d) The Trustee shall not be liable for any action that it takes or omits
to take in good faith which it reasonably believes to be authorized or within
its rights or powers conferred upon it by this Indenture.
(e) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, 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, upon reasonable notice to the Company, to examine the books,
records, and premises of the Company, personally or by agent or attorney and to
consult with the officers and representatives of the Company, including the
Company's accountants and attorneys.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Holders pursuant to the provisions of this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity satisfactory to
the Trustee against the costs, expenses and liabilities which may be incurred by
it in compliance with such request, order or direction.
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(g) The Trustee shall not be required to give any bond or surety in respect
of the performance of its powers and duties hereunder.
(h) Delivery of reports, information and documents to the Trustee under
Section 4.08 is for informational purposes only and the Trustee's receipt of the
foregoing shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company's compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company, any of their
Subsidiaries, or their respective Affiliates with the same rights it would have
if it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Notes, and it shall not be accountable for the Company's use of
the proceeds from the Notes, and it shall not be responsible for any statement
of the Company in this Indenture or the Notes other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it is
actually known to a Trust Officer, the Trustee shall mail to each Holder notice
of the uncured Default or Event of Default within 90 days after obtaining
knowledge thereof. Except in the case of a Default or an Event of Default in
payment of principal of, or interest on, any Note, including an accelerated
payment, a Default in payment on the Change of Control Payment Date pursuant to
a Change of Control Offer or on the Net Proceeds Offer Payment Date pursuant to
a Net Proceeds Offer and a Default in compliance with Article Five hereof, the
Trustee may withhold the notice if and so long as its Board of Directors, the
executive committee of its Board of Directors or a committee of its directors
and/or Trust Officers in good faith determines that withholding the notice is in
the interest of the Holders. The foregoing sentence of this Section 7.05 shall
be in lieu of the proviso to ss. 315(b) of the TIA and such proviso to ss.
315(b) of the TIA is hereby expressly excluded from this Indenture and the
Notes, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after November 1 of each year beginning with 2002 and for so
long as Notes remain outstanding, the Trustee shall, to the extent that any of
the events described in TIA ss. 313(a) occurred within the previous twelve
months, but not otherwise, mail to each Holder a brief report dated as of such
date that complies with TIA ss. 313(a). The Trustee also shall comply with TIA
xx.xx. 313(b), (c) and (d).
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A copy of each 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.
The Company shall promptly notify the Trustee if the Notes become listed on
any stock exchange and the Trustee shall comply with TIA ss. 313(d).
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such compensation
for its services as has been agreed to in writing signed by the Company and the
Trustee. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred or made
by it in connection with the performance of its duties under this Indenture.
Such expenses shall include the reasonable fees and expenses of the Trustee's
agents, counsel, accountants and experts.
The Company shall indemnify each of the Trustee (or any predecessor
Trustee) and its agents, employees, stockholders, Affiliates and directors and
officers for, and hold them each harmless against, any and all loss, liability,
damage, claim or expense (including reasonable fees and expenses of counsel),
including taxes (other than taxes based on the income of the Trustee) incurred
by them except for such actions to the extent caused by any negligence, bad
faith or willful misconduct on their part, arising out of or in connection with
the acceptance or administration of this Indenture including the reasonable
costs and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their rights, powers or
duties hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. At the Trustee's
sole discretion, the Company shall defend the claim and the Trustee shall
cooperate and may participate in the defense; provided, however, that any
settlement of a claim shall be approved in writing by the Trustee if such
settlement would result in an admission of liability by the Trustee or if such
settlement would not be accompanied by a full release of the Trustee for all
liability arising out of the events giving rise to such claim. Alternatively,
the Trustee may at its option have separate counsel of its own choosing and the
Company shall pay the reasonable fees and expenses of such counsel.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or premium, if any, or interest on particular
Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(f) or (g) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 7.07 shall survive the termination of this
Indenture or the earlier resignation or removal of the Trustee.
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SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company. The Holders
of a majority in principal amount of the outstanding Notes may remove the
Trustee and appoint a successor Trustee with the Company's consent, by so
notifying the Company and the Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall notify each Holder of such event
and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in aggregate principal
amount of the outstanding Notes may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee, subject to the lien provided in Section 7.07, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The Company shall mail notice of such successor Trustee's appointment
to each Holder.
If a successor Trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in aggregate principal amount of the outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding any resignation or replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07 shall continue
for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the resulting, surviving or transferee corporation without any further act
shall, if such resulting, surviving or transferee corporation is
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otherwise eligible hereunder, be the successor Trustee; provided, however,
that such corporation shall be otherwise qualified and eligible under this
Article Seven.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirement of
TIA xx.xx. 310(a)(1), (2) and (5). The Trustee (or, in the case of a Trustee
that is a corporation included in a bank holding company system, the related
bank holding company) shall have a combined capital and surplus of at least $150
million as set forth in its most recent published annual report of condition,
and have a Corporate Trust Office in the City of New York. In addition, if the
Trustee is a corporation included in a bank holding company system, the Trustee,
independently of such bank holding company, shall meet the capital requirements
of TIA ss. 310(a)(2). The Trustee shall comply with TIA ss. 310(b); provided,
however, that there shall be excluded from the operation of TIA ss. 310(b)(1)
any indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are outstanding,
if the requirements for such exclusion set forth in TIA ss. 310(b)(1) are met.
The provisions of TIA ss. 310 shall apply to the Company, as obligor of the
Notes.
SECTION 7.11. Preferential Collection of Claims Against the Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein. The
provisions of TIA ss. 311 shall apply to the Company, as obligor on the Notes.
SECTION 7.12. Force Majeure.
In no event shall the Trustee be liable for any failure or delay in the
performance of its obligations hereunder because of circumstances beyond the
Trustee's control, including, but not limited to, acts of God, flood, war
(whether declared or undeclared), terrorism, fire, riot, embargo, government
action, including any laws, ordinances, regulations, governmental action or the
like which delay, restrict or prohibit the providing of the services
contemplated by this Indenture.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations.
This Indenture will be discharged and will 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) as to all outstanding Notes
when (a) either (i) all the Notes, theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid and
Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the
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Company and thereafter repaid to the Company or discharged from such trust)
have been delivered to the Trustee for cancellation or (ii) all Notes not
theretofore delivered to the Trustee for cancellation have become due and
payable and the Company has irrevocably deposited or caused to be deposited with
the Trustee funds in an amount sufficient to pay and discharge the entire
Indebtedness on the Notes not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest on the Notes to
the date of deposit together with irrevocable instructions from the Company
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 all other sums payable
under this Indenture by the Company; and (c) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel stating that all
conditions precedent under this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with; provided, however, that
such counsel may rely, as to matters of fact, on a certificate or certificates
of officers of the Company.
The Company may, at its option and at any time, elect to have its
obligations and the corresponding obligations of the Subsidiary Guarantors
discharged with respect to the outstanding Notes ("Legal Defeasance"). Such
Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the outstanding Notes, and
satisfied all of its obligations with respect to the Notes, except for: (1) the
rights of Holders to receive payments in respect of the principal of, premium,
if any, and interest on the Notes when such payments are due, (2) the Company's
obligations with respect to the Notes concerning issuing temporary Notes,
registration of Notes, mutilated, destroyed, lost or stolen Notes and the
maintenance of an office or agency for payments, (3) the rights, powers, trust,
duties and immunities of the Trustee and the Company's obligations in connection
therewith and (4) the Legal Defeasance provisions of this Section 8.01. In
addition, the Company may, at its option and at any time, elect to have the
obligations of the Company and the Subsidiary Guarantors, if any, released with
respect to covenants contained in Sections 4.04, 4.05, 4.08 and 4.10 through
4.20 and Article Five ("Covenant Defeasance") and thereafter any omission to
comply with such obligations shall not constitute a Default or Event of Default
with respect to the Notes. In the event of Covenant Defeasance, those events
described under Section 6.01 (except those events described in Section
6.01(a),(b),(f) and (g)) will no longer constitute an Event of Default with
respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders cash in United States dollars, non-callable U.S.
Government Obligations, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on the Notes
on the stated date for payment thereof or on the applicable Redemption Date, as
the case may be;
(2) in the case of Legal Defeasance, the Company shall have delivered to
the Trustee an Opinion of Counsel in the United States reasonably acceptable to
the Trustee confirming that (a) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since the date of
this Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion of
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Counsel shall confirm that, the Holders 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;
(3) in the case of Covenant Defeasance, the Company shall have delivered to
the Trustee an Opinion of Counsel in the United States reasonably acceptable to
the Trustee confirming that the Holders 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;
(4) no Default or Event of Default shall have occurred and be continuing on
the date of such deposit or insofar as Events of Default under Section 6.01(f)
or (g) from bankruptcy or insolvency events are concerned, at any time in the
period ending on the 91st day after the date of deposit;
(5) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under this Indenture or any
other agreement or instrument to which the Company or any of its Restricted
Subsidiaries is a party or by which the Company or any of its Restricted
Subsidiaries is bound;
(6) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company or others;
(7) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance, as the case may be, have been complied with; provided, however, that
such counsel may rely, as to matters of fact, on a certificate or certificates
of officers of the Company; and
(8) the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally; provided,
however, that such counsel may rely, as to matters of fact, on a certificate or
certificates of officers of the Company.
SECTION 8.02. Application of Trust Money.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or U.S.
Government Obligations deposited with it pursuant to Section 8.01, and shall
apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of the principal of
and interest on the Notes. The Trustee shall be under no obligation to
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invest said U.S. Legal Tender or U.S. Government Obligations except as it
may agree in writing with the Company.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Legal Tender or U.S. Government
Obligations deposited pursuant to Section 8.01 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 outstanding Notes.
SECTION 8.03. Repayment to the Company.
Subject to Section 8.01, the Trustee and the Paying Agent shall promptly
pay to the Company upon request any excess U.S. Legal Tender or U.S. Government
Obligations held by them at any time and thereupon shall be relieved from all
liability with respect to such money. The Trustee and the Paying Agent shall pay
to the Company upon request any money held by them for the payment of principal
or interest that remains unclaimed for one year; provided, however, that the
Trustee or such Paying Agent, before being required to make any payment, may at
the expense of the Company cause to be published once in a newspaper of general
circulation in the City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed and that after a date specified
therein which shall be at least 30 days from the date of such publication or
mailing any unclaimed balance of such money then remaining will be repaid to the
Company. After payment to the Company, Holders entitled to such money must look
to the Company for payment as general creditors unless an applicable law
designates another Person.
SECTION 8.04. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with Section 8.01 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.01 until such time as the Trustee or Paying Agent is permitted to apply all
such U.S. Legal Tender or U.S. Government Obligations in accordance with Section
8.01; provided, however, that if the Company has made any payment of interest on
or principal of any Notes because of the reinstatement of their obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the U.S. Legal Tender or U.S. Government Obligations
held by the Trustee or Paying Agent.
SECTION 8.05. Acknowledgment of Discharge by Trustee.
After (i) the conditions of Section 8.01 have been satisfied, (ii) the
Company has paid or caused to be paid all other sums payable hereunder by the
Company and (iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (i) above relating to the satisfaction and
discharge of this Indenture have been complied with, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
this Indenture except for those surviving obligations specified in
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Section 8.01, provided the legal counsel delivering such Opinion of Counsel
may rely as to matters of fact on one or more Officers' Certificates of the
Company.
ARTICLE NINE
MODIFICATION OF THE INDENTURE
SECTION 9.01. Without Consent of Holders.
Subject to the provisions of Section 9.02, the Company, the Subsidiary
Guarantors and the Trustee may from time to time amend, waive or supplement this
Indenture without notice to or consent of any Holder: (a) to cure any ambiguity,
defect or inconsistency; (b) to comply with Section 5.01 of this Indenture; (c)
to add additional Subsidiary Guarantors in accordance with Section 4.20 under
supplemental indentures that need be signed only by the additional Subsidiary
Guarantor(s), (d) to provide for uncertificated Notes in addition to
certificated Notes; (e) to comply with any requirements of the Commission in
order to effect or maintain the qualification of this Indenture under the TIA;
or (f) to make any change that would provide any additional benefit or rights to
the Holders or that does not adversely affect the rights of any Holder.
Notwithstanding the foregoing, the Trustee and the Company may not make any
change that adversely affects the rights of any Holder under this Indenture
without the consent of such Holder. In formulating its opinion on such matters,
the Trustee will be entitled to rely on such evidence as it deems appropriate,
including, without limitation, solely on an Opinion of Counsel; provided,
however, that in delivering such Opinion of Counsel, such counsel may rely as to
matters of fact, on a certificate or certificates of officers of the Company.
SECTION 9.02. With Consent of Holders.
All other modifications and amendments of this Indenture may be made with
the consent of the Holders of a majority in the then outstanding principal
amount of the then outstanding Notes, except that, without the consent of each
Holder of the Notes affected thereby, no amendment may, directly or indirectly:
(i) reduce the amount of Notes whose Holders must consent to any amendment; (ii)
reduce the rate of or change or have the effect of changing the time for payment
of interest, including defaulted interest, on any Notes; (iii) reduce the
principal of or change or have the effect of changing the fixed maturity of any
Notes, or change the date on which any Notes may be subject to redemption or
repurchase, or reduce the redemption or repurchase price therefor; (iv) make any
Notes payable in money other than that stated in the Notes; (v) make any change
in provisions of this Indenture protecting the right of each Holder of a Note to
receive payment of principal of and interest on such Note on or after the due
date thereof or to bring suit to enforce such payment or permitting Holders of a
majority in principal amount of Notes to waive Defaults or Events of Default;
(vi) amend, change or modify in any material respect the obligation of the
Company to make and consummate a Change of Control Offer in the event of a
Change of Control or make and consummate a Net Proceeds Offer with respect to
any Asset Sale that has been consummated or modify any of the provisions or
definitions with respect thereto; (vii) modify or change any provision of this
Indenture or Section 1.01 affecting the ranking of the Notes or any Guarantee in
a manner which adversely
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affects the Holders; or (viii) release any Subsidiary Guarantor from any of
its obligations under its Guarantee or this Indenture otherwise than in
accordance with the terms of this Indenture.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment, waiver or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect; provided, however, that this Section 9.03
shall not of itself require that this Indenture or the Trustee be qualified
under the TIA or constitute any admission or acknowledgment by any party hereto
that any such qualification is required prior to the time this Indenture and the
Trustee are required by the TIA to be so qualified.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder of
a Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. Subject
to the following paragraph, any such Holder or subsequent Holder may revoke the
consent as to such Holder's Note or portion of such Note by notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Notes have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver. An amendment, supplement or waiver becomes
effective upon receipt by the Trustee of such Officers' Certificate and evidence
of consent by the Holders of the requisite percentage in principal amount of
outstanding Notes.
The Company may, but shall not be obligated to, fix a Record Date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which Record Date shall be at least 30 days prior to the
first solicitation of such consent. If a Record Date is fixed, then
notwithstanding the second sentence of the immediately preceding paragraph,
those Persons who were Holders at such Record Date (or their duly designated
proxies), and only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
Record Date. No such consent shall be valid or effective for more than 90 days
after such Record Date unless consents from Holders of the requisite percentage
in principal amount of outstanding Notes required hereunder for the
effectiveness of such consents shall have also been given and not revoked within
such 90 day period.
SECTION 9.05. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of such Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determine, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.
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SECTION 9.06. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article Nine; provided, however, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. In executing such supplement or waiver the Trustee shall be entitled
to receive indemnity reasonably satisfactory to it, and shall be fully protected
in relying upon an Opinion of Counsel and an Officers' Certificate of the
Company, stating that no event of default shall occur as a result of such
amendment, supplement or waiver and that the execution of any amendment,
supplement or waiver authorized pursuant to this Article Nine is authorized or
permitted by this Indenture, provided the legal counsel delivering such Opinion
of Counsel may rely as to matters of fact on one or more Officers' Certificates
of the Company. Such Opinion of Counsel shall not be an expense of the Trustee.
ARTICLE TEN
[INTENTIONALLY OMITTED]
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control; provided, however, that this Section 11.01
shall not of itself require that this Indenture or the Trustee be qualified
under the TIA or constitute any admission or acknowledgment by any party hereto
that any such qualification is required prior to the time this Indenture and the
Trustee are required by the TIA to be so qualified.
SECTION 11.02. Notices.
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
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if to the Company:
c/o Magnum Hunter Resources, Inc.
000 Xxxx Xxx Xxxxxxx Xxxx.
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopier Number: (000) 000-0000
Attn: Chief Executive Officer
if to the Trustee:
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier Number: (000) 000-0000
Attn: Corporate Trust and Agency Services
Each of the Company and the Trustee by written notice to the other may
designate additional or different addresses for notices to such Person. Any
notice or communication to the Company or the Trustee shall be deemed to have
been given or made as of the date so delivered if hand delivered; when answered
back, if telexed; when receipt is acknowledged, if faxed; and five (5) calendar
days after mailing if sent by registered or certified mail, postage prepaid
(except that a notice of change of address shall not be deemed to have been
given until actually received by the addressee).
Any notice or communication mailed to a Holder shall be mailed to him by
first class mail or other equivalent means at his address as it appears on the
registration books of the Registrar ten (10) days prior to such mailing and
shall be sufficiently given to him if so mailed within the time prescribed.
Any notice or communication shall also be so mailed to any Person described
in TIA ss. 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
SECTION 11.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and any other Person shall have the protection of TIA ss.
312(c).
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SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company and/or any Subsidiary
Guarantor to the Trustee to take any action under this Indenture, the Company
and/or any Subsidiary Guarantor shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to the
Trustee, stating that, in the opinion of the signers, all conditions precedent
to be performed by the Company, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent to be performed by the Company, if any, provided for
in this Indenture relating to the proposed action have been complied with (which
counsel, as to factual matters, may rely on an Officers' Certificate).
SECTION 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture, other than the Officers' Certificate
required by Section 4.06, shall comply with TIA ss. 314(e) and include:
(1) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is reasonably necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of each such Person,
such condition or covenant has been complied with.
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules for its functions.
SECTION 11.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment is a
Saturday, a Sunday or a day on which banking institutions in New York, New York
or at such place of payment are not required to be open. If a payment date is a
Legal Holiday at such place, payment may be made
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at such place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
SECTION 11.08. Governing Law.
THIS INDENTURE , THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICT OF LAWS TO THE EXTENT THAT
THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Each of the parties hereto agrees to submit to the jurisdiction of the courts of
the State of New York in any action or proceeding arising out of or relating to
this Indenture.
SECTION 11.09. 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.
SECTION 11.10. No Personal Liability.
No director, officer, employee or stockholder, as such, of the Company or
any Subsidiary Guarantor, as such, shall have any liability for any obligations
of the Company or any Subsidiary Guarantor under the Notes, this Indenture, the
Guarantees or the Registration Rights Agreement or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes.
SECTION 11.11. Successors.
All agreements of the Company and the Subsidiary Guarantors in this
Indenture, the Notes and the Guarantees shall bind their successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 11.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together shall represent the same
agreement.
SECTION 11.13. Severability.
In case any one or more of the provisions in this Indenture or in the Notes
shall be held invalid, illegal or unenforceable, in any respect for any reason,
the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions shall not in any way be affected or
impaired thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.
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SECTION 11.14. Independence of Covenants.
All covenants and agreements in this Indenture and the Notes shall be given
independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise be within the limitations of, another covenant shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
ARTICLE TWELVE
GUARANTEE OF NOTES
SECTION 12.01. Unconditional Guarantee.
Subject to the provisions of this Article Twelve, each Subsidiary
Guarantor, if any, hereby, jointly and severally, unconditionally and
irrevocably guarantees, on an unsecured senior basis (such guarantee to be
referred to herein as a "Guarantee") to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company or any other Subsidiary Guarantors to the Holders
or the Trustee hereunder or thereunder, that: (a) the principal of, premium, if
any, and interest on the Notes (and any Additional Interest payable thereon)
shall be duly and punctually paid in full when due, whether at maturity, upon
redemption at the option of Holders pursuant to the provisions of the Notes
relating thereto, by acceleration or otherwise, and interest on the overdue
principal and (to the extent permitted by law) interest, if any, on the Notes
and all other obligations of the Company or the Subsidiary Guarantors to the
Holders or the Trustee hereunder or thereunder (including amounts due the
Trustee under Section 7.07 hereof) and all other obligations shall be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of any Notes or
any of such other obligations, the same shall be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed, or failing performance of any other obligation of the
Company to the Holders under this Indenture or under the Notes, for whatever
reason, each Subsidiary Guarantor shall be obligated to pay, or to perform or
cause the performance of, the same immediately. An Event of Default under this
Indenture or the Notes shall constitute an event of default under the
Guarantees, and shall entitle the Holders of Notes to accelerate the obligations
of the Guarantors hereunder in the same manner and to the same extent as the
obligations of the Company.
Each of the Subsidiary Guarantors hereby agrees that its obligations
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, any release of any other Subsidiary
Guarantor, the recovery of any judgment against the Company, any action to
enforce the same, whether or not a Guarantee is affixed to any particular Note,
or any other circumstance which might otherwise
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constitute a legal or equitable discharge or defense of a guarantor. Each
of the Subsidiary Guarantors hereby waives the benefit of 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 covenants
that its Guarantee shall not be discharged except by complete performance of the
obligations contained in the Notes, this Indenture and this Guarantee. Each
Guarantee is a guarantee of payment and not of collection. If any Holder or the
Trustee is required by any court or otherwise to return to the Company or to any
Subsidiary Guarantor, or any custodian, trustee, liquidator or other similar
official acting in relation to the Company or such Subsidiary Guarantor, any
amount paid by the Company or such Subsidiary Guarantor to the Trustee or such
Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Subsidiary Guarantor further agrees
that, as between it, on the one hand, and the Holders of Notes and the Trustee,
on the other hand, (a) subject to this Article Eleven, the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six
hereof for the purposes of its Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (b) in the event of any acceleration of such obligations
as provided in Article Six hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Subsidiary Guarantors for
the purpose of its Guarantee.
No stockholder, officer, director, employee or incorporator, past, present
or future, or any Subsidiary Guarantor, as such, shall have any personal
liability under the Guarantees by reason of his, her or its status as such
stockholder, officer, director, employee or incorporator.
SECTION 12.02. Limitations on Guarantees.
The obligations of each Subsidiary Guarantor under its Guarantee will be
limited to the maximum amount which, 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 Guarantee or pursuant to its contribution obligations under the Indenture,
will result in the obligations of such Subsidiary Guarantor under its Guarantee
not constituting a fraudulent conveyance or fraudulent transfer under federal or
state law.
SECTION 12.03. Execution and Delivery of Guarantee.
To further evidence its Guarantee set forth in Section 12.01, each
Subsidiary Guarantor hereby agrees that a notation of such Guarantee,
substantially in the form of Exhibit E herein, shall be endorsed on each Note
authenticated and delivered by the Trustee. Such Guarantee shall be executed on
behalf of each Subsidiary Guarantor by either manual or facsimile signature of
one Officer of each Subsidiary Guarantor, who, in each case, shall have been
duly authorized to so execute by all requisite corporate action. The validity
and enforceability of any Guarantee shall not be affected by the fact that it is
not affixed to any particular Note.
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Each of the Subsidiary Guarantors hereby agrees that its Guarantee set
forth in Section 12.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Guarantee.
If an Officer of a Subsidiary Guarantor whose signature is on this
Indenture or a Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which such Guarantee is endorsed or at any time
thereafter, such Subsidiary Guarantor's Guarantee of such Note shall be valid
nevertheless. The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of each Subsidiary Guarantor.
SECTION 12.04. Release of a Subsidiary Guarantor.
(a) If no Default exists or would exist under this Indenture, (i) upon the
sale or disposition of all of the Capital Stock of a Subsidiary Guarantor by the
Company or a Restricted Subsidiary of the Company in a transaction constituting
an Asset Sale in accordance with Section 4.16, or upon the consolidation or
merger of a Subsidiary Guarantor with or into any Person in compliance with
Article Five (in each case, other than to the Company or an Affiliate of the
Company or a Restricted Subsidiary), or (ii) upon the designation of a
Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with Section
4.14, such Subsidiary Guarantor and each Subsidiary of such Subsidiary Guarantor
that is also a Subsidiary Guarantor shall be deemed released from all
obligations under this Article Twelve without any further action required on the
part of the Trustee or any Holder; provided, however, that each such Subsidiary
Guarantor is sold or disposed of or designated in accordance with this
Indenture. Any Subsidiary Guarantor not so released or the entity surviving such
Subsidiary Guarantor, as applicable, shall remain or be liable under its
Guarantee as provided in this Article Twelve.
(b) The Trustee shall deliver an appropriate instrument evidencing the
release of a Subsidiary Guarantor upon receipt of a request by the Company or
such Subsidiary Guarantor accompanied by an Officers' Certificate and an Opinion
of Counsel certifying as to the compliance with this Section 12.04, provided the
legal counsel delivering such Opinion of Counsel may rely as to matters of fact
on one or more Officers Certificates of the Company.
The Trustee shall execute any documents reasonably requested by the Company
or a Subsidiary Guarantor in order to evidence the release of such Subsidiary
Guarantor from its obligations under its Guarantee endorsed on the Notes and
under this Article Twelve.
Except as set forth in Articles Four and Five and this Section 12.04,
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
property of a Subsidiary Guarantor as an entirety or substantially as an
entirety to the Company or another Subsidiary Guarantor.
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SECTION 12.05. Waiver of Subrogation.
Until this Indenture is discharged and all of the Notes are discharged and
paid in full, each Subsidiary Guarantor hereby irrevocably waives and agrees not
to exercise any claim or other rights which it may now or hereafter acquire
against the Company that arise from the existence, payment, performance or
enforcement of the Company's obligations under the Notes or this Indenture and
such Subsidiary Guarantor's obligations under its Guarantee and this Indenture,
in any such instance including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, and any right to
participate in any claim or remedy of the Holders against the Company, whether
or not such claim, remedy or right arises in equity, or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Company, directly or indirectly, in cash or other property or by set-off or
in any other manner, payment or security on account of such claim or other
rights. If any amount shall be paid to any Subsidiary Guarantor in violation of
the preceding sentence and any amounts owing to the Trustee or the Holders of
Notes under the Notes, this Indenture, or any other document or instrument
delivered under or in connection with such agreements or instruments, shall not
have been paid in full, such amount shall have been deemed to have been paid to
such Subsidiary Guarantor for the benefit of, and held in trust for the benefit
of, the Trustee or the Holders and shall forthwith be paid to the Trustee for
the benefit of itself or such Holders to be credited and applied to the
obligations in favor of the Trustee or the Holders, as the case may be, whether
matured or unmatured, in accordance with the terms of this Indenture. Each
Subsidiary Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set forth in this Section 12.05 is knowingly made in contemplation of
such benefits.
SECTION 12.06. Immediate Payment.
Each Subsidiary Guarantor agrees to make immediate payment to the Trustee
on behalf of the Holders of all Obligations owing or payable to the respective
Holders upon receipt of a demand for payment therefor by the Trustee to such
Subsidiary Guarantor in writing.
SECTION 12.07. No Set-Off.
Each payment to be made by a Subsidiary Guarantor hereunder in respect of
the Obligations shall be payable in the currency or currencies in which such
Obligations are denominated, and shall be made without set-off, counterclaim,
reduction or diminution of any kind or nature.
SECTION 12.08. Obligations Absolute.
The obligations of each Subsidiary Guarantor hereunder are and shall be
absolute and unconditional and any monies or amounts expressed to be owing or
payable by each Subsidiary Guarantor hereunder which may not be recoverable from
such Subsidiary Guarantor on the basis of a Guarantee shall be recoverable from
such Subsidiary Guarantor as a primary obligor and principal debtor in respect
thereof.
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SECTION 12.09. Obligations Continuing.
The obligations of each Subsidiary Guarantor hereunder shall be continuing
and shall remain in full force and effect until all the obligations have been
paid and satisfied in full. Each Subsidiary Guarantor agrees with the Trustee
that it will from time to time deliver to the Trustee suitable acknowledgments
of this continued liability hereunder and under any other instrument or
instruments in such form as counsel to the Trustee may advise and as will
prevent any action brought against it in respect of any default hereunder being
barred by any statute of limitations now or hereafter in force and, in the event
of the failure of a Subsidiary Guarantor so to do, it hereby irrevocably
appoints the Trustee the attorney and agent of such Subsidiary Guarantor to
make, execute and deliver such written acknowledgment or acknowledgments or
other instruments as may from time to time become necessary or advisable, in the
judgment of the Trustee on the advice of counsel, to fully maintain and keep in
force the liability of such Subsidiary Guarantor hereunder.
SECTION 12.10. Obligations Not Reduced.
The obligations of each Subsidiary Guarantor hereunder shall not be
satisfied, reduced or discharged solely by the payment of such principal,
premium, if any, interest, fees and other monies or amounts as may at any time
prior to discharge of this Indenture pursuant to Article 8 be or become owing or
payable under or by virtue of or otherwise in connection with the Notes or this
Indenture.
SECTION 12.11. Obligations Reinstated.
The obligations of each Subsidiary Guarantor hereunder shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
which would otherwise have reduced the obligations of any Subsidiary Guarantor
hereunder (whether such payment shall have been made by or on behalf of the
Company or by or on behalf of a Subsidiary Guarantor) is rescinded or reclaimed
from any of the Holders upon the insolvency, bankruptcy, liquidation or
reorganization of the Company or any Subsidiary Guarantor or otherwise, all as
though such payment had not been made. If demand for, or acceleration of the
time for, payment by the Company is stayed upon the insolvency, bankruptcy,
liquidation or reorganization of the Company, all such Indebtedness otherwise
subject to demand for payment or acceleration shall nonetheless be payable by
each Subsidiary Guarantor as provided herein.
SECTION 12.12. Obligations Not Affected.
The obligations of each Subsidiary Guarantor hereunder shall not be
affected, impaired or diminished in any way by any act, omission, matter or
thing whatsoever, occurring before, upon or after any demand for payment
hereunder (and whether or not known or consented to by any Subsidiary Guarantor
or any of the Holders) which, but for this provision, might constitute a whole
or partial defense to a claim against any Subsidiary Guarantor hereunder or
might operate to release or otherwise exonerate any Subsidiary Guarantor from
any of its obligations hereunder or otherwise affect such obligations, whether
occasioned by default of any of the Holders or otherwise, including, without
limitation:
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(a) any limitation of status or power, disability, incapacity or other
circumstance relating to the Company or any other person, including any
insolvency, bankruptcy, liquidation, reorganization, readjustment, composition,
dissolution, winding up or other proceeding involving or affecting the Company
or any other person;
(b) any irregularity, defect, unenforceability or invalidity in respect of
any Indebtedness or other obligation of the Company or any other person under
this Indenture, the Notes or any other document or instrument;
(c) any failure of the Company, whether or not without fault on their part,
to perform or comply with any of the provisions of this Indenture or the Notes,
or to give notice thereof to a Subsidiary Guarantor;
(d) the taking or enforcing or exercising or the refusal or neglect to take
or enforce or exercise any right or remedy from or against the Company or any
other person or their respective assets or the release or discharge of any such
right or remedy;
(e) the granting of time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any other
Person;
(f) any change in the time, manner or place of payment of, or in any other
term of, any of the Notes, or any other amendment, variation, supplement,
replacement or waiver of, or any consent to departure from, any of the Notes or
this Indenture, including, without limitation, any increase or decrease in the
principal amount of or premium, if any, or interest on any of the Notes;
(g) any change in the ownership, control, name, objects, businesses,
assets, capital structure or constitution of the Company or a Subsidiary
Guarantor;
(h) any merger or amalgamation of the Company or a Subsidiary Guarantor
with any Person or Persons;
(i) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of the
Obligations or the obligations of a Subsidiary Guarantor under its Guarantee;
and
(j) any other circumstance (other than by complete, irrevocable payment),
including release of any other Subsidiary Guarantor pursuant to Section 12.04,
that might otherwise constitute a legal or equitable discharge or defense of the
Company under this Indenture or the Notes or of a Subsidiary Guarantor in
respect of its Guarantee hereunder.
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SECTION 12.13. Waiver.
Without in any way limiting the provisions of Section 11.01 hereof, each
Subsidiary Guarantor hereby waives notice of acceptance hereof, notice of any
liability of any Subsidiary Guarantor hereunder, notice or proof of reliance by
the Holders upon the obligations of any Subsidiary Guarantor hereunder, and
diligence, presentment, demand for payment on the Company, protest, notice of
dishonor or non-payment of any of the Obligations, or other notice or
formalities to the Company or any Subsidiary Guarantor of any kind whatsoever.
SECTION 12.14. No Obligation To Take Action Against the Company.
Neither the Trustee nor any other Person shall have any obligation to
enforce or exhaust any rights or remedies or to take any other steps under any
security for the Obligations or against the Company or any other Person or any
Property of the Company or any other Person before the Trustee is entitled to
demand payment and performance by any or all Subsidiary Guarantors of their
liabilities and obligations under their Guarantees or under this Indenture.
SECTION 12.15. Dealing with the Company and Others.
The Holders, without releasing, discharging, limiting or otherwise
affecting in whole or in part the obligations and liabilities of any Subsidiary
Guarantor hereunder and without the consent of or notice to any Subsidiary
Guarantor, may
(a) grant time, renewals, extensions, compromises, concessions, waivers,
releases, discharges and other indulgences to the Company or any other Person;
(b) take or abstain from taking security or collateral from the Company or
from perfecting security or collateral of the Company;
(c) release, discharge, compromise, realize, enforce or otherwise deal with
or do any act or thing in respect of (with or without consideration) any and all
collateral, mortgages or other security given by the Company or any third party
with respect to the obligations or matters contemplated by this Indenture or the
Notes;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or from any
security upon such part of the Obligations as the Holders may see fit or change
any such application in whole or in part from time to time as the Holders may
see fit; and
(f) otherwise deal with, or waive or modify their right to deal with, the
Company and all other Persons and any security as the Holders or the Trustee may
see fit.
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SECTION 12.16. Default and Enforcement.
If any Subsidiary Guarantor fails to pay in accordance with Section 12.06
hereof, the Trustee may proceed in its name as trustee hereunder in the
enforcement of the Guarantee of any such Subsidiary Guarantor and such
Subsidiary Guarantor's obligations thereunder and hereunder by any remedy
provided by law, whether by legal proceedings or otherwise, and to recover from
such Subsidiary Guarantor the obligations.
SECTION 12.17. Amendment, Etc.
No amendment, modification or waiver of any provision of this Indenture
relating to any Subsidiary Guarantor or consent to any departure by any
Subsidiary Guarantor or any other Person from any such provision will in any
event be effective unless it is signed by such Subsidiary Guarantor and the
Trustee.
SECTION 12.18. Acknowledgment.
Each Subsidiary Guarantor hereby acknowledges communication of the terms of
this Indenture and the Notes and consents to and approves of the same.
SECTION 12.19. Costs and Expenses.
Each Subsidiary Guarantor shall pay on demand by the Trustee any and all
reasonable costs, fees and expenses (including, without limitation, legal fees
on a solicitor and client basis) incurred by the Trustee, its agents, advisors
and counsel or any of the Holders in enforcing any of their rights under any
Guarantee.
SECTION 12.20. No Merger or Waiver; Cumulative Remedies.
No Guarantee shall operate by way of merger of any of the obligations of a
Subsidiary Guarantor under any other agreement, including, without limitation,
this Indenture. No failure to exercise and no delay in exercising, on the part
of the Trustee or the Holders, any right, remedy, power or privilege hereunder
or under this Indenture or the Notes, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder or under this Indenture or the Notes preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges in the Guarantee and under this
Indenture, the Notes and any other document or instrument between a Subsidiary
Guarantor and/or the Company and the Trustee are cumulative and not exclusive of
any rights, remedies, powers and privilege provided by law.
SECTION 12.21. Survival of Obligations.
Without prejudice to the survival of any of the other obligations of each
Subsidiary Guarantor hereunder, the obligations of each Subsidiary Guarantor
under Section 12.01 shall survive the payment in full of the Obligations and
shall be enforceable against such Subsidiary Guarantor
-89-
without regard to and without giving effect to any defense, right of offset
or counterclaim available to or which may be asserted by the Company or any
Subsidiary Guarantor.
SECTION 12.22. Guarantee in Addition to Other Obligations.
The obligations of each Subsidiary Guarantor under its Guarantee and this
Indenture are in addition to and not in substitution for any other obligations
to the Trustee or to any of the Holders in relation to this Indenture or the
Notes and any guarantees or security at any time held by or for the benefit of
any of them.
SECTION 12.23. Severability.
Any provision of this Article Twelve which is prohibited or unenforceable
in any jurisdiction shall not invalidate the remaining provisions and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction unless its removal
would substantially defeat the basic intent, spirit and purpose of this
Indenture and this Article Twelve.
SECTION 12.24. Successors and Assigns.
Each Guarantee shall be binding upon and inure to the benefit of each
Subsidiary Guarantor and the Trustee and the other Holders and their respective
successors and permitted assigns, except that no Subsidiary Guarantor may assign
any of its obligations hereunder or thereunder.
S-41
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
MAGNUM HUNTER RESOURCES, INC.
By:____________________________
Name:
Title:
MAGNUM HUNTER PRODUCTION, INC.,
as Guarantor
By:____________________________
Name:
Title:
GRUY PETROLEUM MANAGEMENT CO.
as Guarantor
By:____________________________
Name:
Title:
HUNTER GAS GATHERING, INC.,
as Guarantor
By:____________________________
Name:
Title:
TRAPMAR PROPERTIES, INC.,
as Guarantor
By:____________________________
Name:
Title:
S-2
CONMAG ENERGY CORPORATION,
as Guarantor
By:____________________________
Name:
Title:
PINTAIL ENERGY, INC.,
as Guarantor
By:____________________________
Name:
Title:
PRIZE OPERATING COMPANY,
as Guarantor
By:____________________________
Name:
Title:
PEC (DELAWARE), INC.,
as Guarantor
By:____________________________
Name:
Title:
S-3
PRIZE ENERGY RESOURCES, L.P.,
as Guarantor
By: Prize Operating Company,
its General Partner
By:____________________________
Name:
Title:
OKLAHOMA GAS PROCESSING, INC.,
as Guarantor
By:____________________________
Name:
Title:
S-4
Bankers Trust Company
as Trustee
By:____________________________
Name:
Title:
EXHIBIT A
CUSIP No.: [ ]
MAGNUM HUNTER RESOURCES, INC.
9.60 % SENIOR NOTE DUE 2012, SERIES A
No. [ ] $[ ]
MAGNUM HUNTER RESOURCES, INC., a Nevada corporation (the "Company," which
term includes any successor entities), for value received promises to pay to
CEDE & CO. or registered assigns the principal sum of [ ] Dollars on March 15,
2012.
Interest Payment Dates: March 15 and September 15, commencing September 15,
2002.
Record Dates: March 1 and September 1
Reference is made to the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers and a facsimile of its corporate
seal to be affixed hereto or imprinted hereon.
MAGNUM HUNTER RESOURCES, INC.
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
Dated:
Certificate of Authentication
This is one of the 9.60% Senior Notes due 2012, Series A referred to in the
within-mentioned Indenture.
Bankers Trust Company,
as Trustee
By:_____________________________
Authorized Signatory
Date of Authentication:
(REVERSE OF SECURITY)
9.60 % Senior Note due 2012, Series A
(1) Interest. MAGNUM HUNTER RESOURCES, INC., a Nevada corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from March 15, 2002. The Company will pay interest semi-annually in arrears on
each Interest Payment Date, commencing September 15, 2002. Interest will be
computed on the basis of a 360-day year of twelve 30-day months and, in the case
of a partial month, the actual number of days elapsed.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods) to the extent lawful.
(2) Method of Payment. The Company shall pay interest on the Notes (except
defaulted interest) to the Persons who are the registered Holders at the close
of business on the Record Date immediately preceding the Interest Payment Date
even if the Notes are canceled on registration of transfer or registration of
exchange (including pursuant to an Exchange Offer (as defined in the
Registration Rights Agreement)) after such Record Date. Holders must surrender
Notes to a Paying Agent to collect principal payments. The Company shall 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 ("U.S. Legal Tender").
The Company may deliver any such interest payment to the Paying Agent or to a
Holder at the Holder's registered address.
(3) Paying Agent and Registrar. Initially, Bankers Trust Company (the
"Trustee") will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders.
(4) Indenture. The Company issued the Notes under an Indenture, dated as of
March 15, 2002 (the "Indenture"), among the Company, the Subsidiary Guarantors
and the Trustee. This Note is one of a duly authorized issue of Initial Notes of
the Company designated as its 9.60 % Senior Notes due 2012, Series A (the
"Initial Notes"). The Notes include the Initial Notes, any Additional Notes and
the Exchange Notes, as defined below, issued in exchange for the Initial Notes
pursuant to the Registration Rights Agreement. The Initial Notes, any Additional
Notes and the Exchange Notes are treated as a single class of securities under
the Indenture. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. 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. Code xx.xx. 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture. Notwithstanding anything to the contrary
herein, the Notes are subject to all such terms, and Holders of Notes are
referred to the Indenture and said Act for a statement of them. The Notes are
general unsecured obligations of the Company. Payment on each Note is guaranteed
on a senior basis by the Subsidiary Guarantors pursuant to Article 12 of the
Indenture. Each Holder, by accepting a Note, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time in accordance with its terms.
A-2
(5) Redemption. The Notes will be redeemable, at the Company's option, in
whole at any time or in part from time to time, on and after March 15, 2007,
upon not less than 30 nor more than 60 days' notice, at the following Redemption
Prices (expressed as percentages of the principal amount thereof) if redeemed
during the twelve-month period commencing on March 15 of the years set forth
below, plus, in each case, accrued interest, if any, thereon to the date of
redemption:
Year Percentage
---- ----------
2007.................................. 104.800%
2008.................................. 103.200%
2009.................................. 101.600%
2010 and thereafter................... 100.000%
At any time, or from time to time, on or prior to March 15, 2005, the
Company may, at its option, use all or a portion of the net cash proceeds of one
or more Equity Offerings to redeem up to 35% of the aggregate principal amount
of the Notes originally issued at a redemption price equal to 109.600% of the
aggregate principal amount of the Notes to be redeemed, plus accrued interest,
if any, thereon to the date of redemption; provided, however, that at least 65%
of the aggregate principal amount of Notes originally issued remains outstanding
immediately after giving effect to any such redemption. In order to effect the
foregoing redemption with the proceeds of any Equity Offering, the Company shall
make such redemption not more than 60 days after the consummation of any such
Equity Offering.
(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 such Holder's registered address. Notes in denominations
larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of the
Notes called for redemption shall have been deposited with the Paying Agent for
redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
(7) Offers to Purchase. Sections 4.15 and 4.16 of the Indenture provide
that, after certain Asset Sales (as defined in the Indenture) and upon the
occurrence of a Change of Control (as defined in the Indenture), and subject to
further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
(8) Registration Rights. Pursuant to the Registration Rights Agreement
among the Company, the Subsidiary Guarantors and the Initial Purchasers, the
Company and the Subsidiary Guarantors will be obligated to consummate an
exchange offer pursuant to which the Holder of this Note shall have the right to
exchange this Note for the Company's 9.60 % Senior Notes due 2012, Series B (the
"Exchange Notes"), which have been registered under the Securities Act, in like
principal amount and having terms identical in all material respects as the
Initial Notes. The Holders of the Initial Notes shall be entitled to receive
certain additional interest payments in the event such
A-3
exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
(9) Denominations; Transfer; Exchange. The Notes are in registered form,
without coupons, and (except Notes issued as payment of Interest) in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption.
(10) Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
(11) Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for one year, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
(12) Discharge Prior to Redemption or Maturity. If the Company at any time
deposit with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and comply with the other provisions of the Indenture relating thereto,
the Company will be discharged from certain provisions of the Indenture and the
Notes (including certain covenants, but including, under certain circumstances,
its obligation to pay the principal of and interest on the Notes but without
affecting the rights of the Holders to receive such amounts from such deposits).
(13) Amendment; Supplement; Waiver. Subject to certain exceptions set forth
in the Indenture, the Indenture or the Notes may be amended or supplemented with
the written consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding, and any past Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of not less than a majority in aggregate principal amount
of the Notes then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Indenture or the Notes to, among
other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, comply
with any requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the TIA or comply with Article Five of the
Indenture or make any other change that does not adversely affect the rights of
any Holder of a Note.
(14) Restrictive Covenants. The Indenture imposes certain limitations on
the ability of the Company and the Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of their Capital
Stock or certain Indebtedness, make certain Investments, create or incur liens,
enter into transactions with Affiliates, create dividend or other payment
restrictions affecting Restricted Subsidiaries, issue Preferred Stock of their
Restricted Subsidiaries, and on the ability of the Company and their Restricted
Subsidiaries to merge or consolidate with any other Person or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of the
Company's and their Restricted Subsidiaries' assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions. Pursuant to
A-4
Section 4.06 of the Indenture, the Company must annually report to the
Trustee on compliance with such limitations.
(15) Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.
(16) Defaults and Remedies. Except as set forth in the Indenture, if an
Event of Default occurs and is continuing, the Trustee or the Holders of not
less than 25% in principal amount of Notes then outstanding may declare all the
Notes to be due and payable in the manner, at the time and with the effect
provided in the Indenture. Holders of Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee is not obligated to
enforce the Indenture or the Notes unless it has received indemnity reasonably
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest when due, for any reason or a Default in compliance with Article Five
of the Indenture) if it determines that withholding notice is in their interest.
(17) Trustee Dealings with Company. 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 the Company, their Subsidiaries or their respective
Affiliates as if it were not the Trustee.
(18) No Recourse Against Others. No partner, director, officer, employee or
stockholder, as such, of the Company or any Subsidiary Guarantor, as such, shall
have any liability for any obligations of the Company or any Subsidiary
Guarantor under the Notes, the Indenture, the Guarantees or the Registration
Rights Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
(19) Guarantees. This Note will be entitled to the benefits of certain
Guarantees, if any, made for the benefit of the Holders. Reference is hereby
made to the Indenture for a statement of the respective rights, limitations of
rights, duties and obligations thereunder of the Subsidiary Guarantors, the
Trustee and the Holders.
(20) Authentication. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
(21) Governing Law. This Note and the Indenture shall be governed by and
construed in accordance with the laws of the State of New York, as applied to
contracts made and performed within the State of New York, without regard to
principles of conflict of laws. Each of the parties hereto agrees to submit to
the jurisdiction of the courts of the State of New York in any action or
proceeding arising out of or relating to this Note.
(22) Abbreviations and Defined Terms. Customary abbreviations may be used
in the name of a Holder of a Note or an assignee, such as: TEN COM (= tenants in
common), TEN ENT
A-5
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
(23) CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture, which has the text of this Note.
Requests may be made to: Magnum Hunter Resources, Inc., 000 Xxxx Xxx Xxxxxxx
Xxxx., Xxxxx 0000, Xxxxxx, Xxxxx 00000.
A-6
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
(Print or type name, address and zip code and social security or tax ID
number of assignee)
and irrevocably appoint _______________________________________, agent to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.
Dated: _____________________ Signed:___________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:___________________________________________
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date of the declaration by the Commission of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) [ ], the undersigned confirms that it has not utilized any
general solicitation or general advertising in connection with the transfer:
A-7
[Check One]
(1) __ to the Company or a subsidiary thereof; or
(2) __ pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
(3) __ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended) that
has furnished to the Trustee a signed letter containing certain representations
and agreements (the form of which letter can be obtained from the Trustee); or
(4) __ outside the United states to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act of 1933, as amended; or
(5) __ pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933, as amended; or
(6) __ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) __ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such
Note is not being transferred to an "affiliate" of the Company as defined in
Rule 144 under the Securities Act of 1933, as amended (an "Affiliate"):
[ ] The transferee is an Affiliate of the Company.
Unless one of the items 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 unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.17 of the Indenture
shall have been satisfied; provided, however, that if item (3), (4), (5) or (7)
is checked, the Company or the Trustee may require, prior to registering any
such transfer of the Notes, in their sole discretion, such written legal
opinions, certifications (including an investment letter in the case of box (3)
or (4)) and other information as the Trustee or the Company have reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, as amended.
Dated: _____________________ Signed:__________________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:___________________________________________
A-8
TO BE COMPLETED BY PURCHASER IF (2) 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 of 1933, as amended and
is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: __________________ ________________________________________
NOTICE: To be executed by
an executive officer
A-9
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.15 or Section 4.16 of the Indenture, check the appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$
-------------------
Dated: _________________
----------------------------------------------------
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in every
particular without alteration
or enlargement or any change
whatsoever and be guaranteed.
Signature Guarantee: _____________________________
A-10
EXHIBIT B
CUSIP No.: [ ]
MAGNUM HUNTER RESOURCES, INC.
9.60 % SENIOR NOTE DUE 2012, SERIES B
No. [ ] $[ ]
MAGNUM HUNTER RESOURCES, INC., a Nevada corporation (the "Company," which
term includes any successor entities), for value received promises to pay to
CEDE & CO. or registered assigns the principal sum of [ ] Dollars on March 15,
2012.
Interest Payment Dates: March 15 and September 15, commencing September 15,
2002.
Record Dates: March 1 and September 1
Reference is made to the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers and a facsimile of its corporate
seal to be affixed hereto or imprinted hereon.
MAGNUM HUNTER RESOURCES, INC.
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
Dated:
Certificate of Authentication
This is one of the 9.60 % Senior Notes due 2012, Series B referred to in
the within-mentioned Indenture.
Bankers Trust Company, as Trustee
By:______________________________
Authorized Signatory
Date of Authentication:
B-1
(REVERSE OF SECURITY)
9.60 % Senior Note due 2012, Series B
(1) Interest. MAGNUM HUNTER RESOURCES, INC., a Nevada corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from March 15, 2002. The Company will pay interest semi-annually in arrears on
each Interest Payment Date, commencing September 15, 2002. Interest will be
computed on the basis of a 360-day year of twelve 30-day months and, in the case
of a partial month, the actual number of days elapsed.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods) to the extent lawful.
(2) Method of Payment. The Company shall pay interest on the Notes (except
defaulted interest) to the Persons who are the registered Holders at the close
of business on the Record Date immediately preceding the Interest Payment Date
even if the Notes are canceled on registration of transfer or registration of
exchange after such Record Date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company shall 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 ("U.S. Legal Tender"). The Company may
deliver any such interest payment to the Paying Agent or to a Holder at the
Holder's registered address.
(3) Paying Agent and Registrar. Initially, Bankers Trust Company (the
"Trustee") will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders.
(4) Indenture. The Company issued the Notes under an Indenture, dated as of
March 15, 2002 (the "Indenture"), among the Company, the Subsidiary Guarantors
and the Trustee. This Note is one of a duly authorized issue of Exchange Notes
of the Company designated as its 9.60% Senior Notes due 2012, Series B (the
"Exchange Notes"). The Notes include the 9.60 % Notes due 2012 (the "Initial
Notes"), the Exchange Notes, issued in exchange for the Initial Notes pursuant
to the Registration Rights Agreement and any Additional Notes. The Initial
Notes, any Additional Notes and the Exchange Notes are treated as a single class
of securities under the Indenture. Capitalized terms herein are used as defined
in the Indenture unless otherwise defined herein. 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. Code xx.xx. 77aaa-77bbbb) (the
"TIA"), as in effect on the date of the Indenture. Notwithstanding anything to
the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and said Act for a statement of them. The
Notes are general unsecured obligations of the Company. Payment on each Note is
guaranteed on a senior basis by the Subsidiary Guarantors pursuant to Article 12
of the Indenture. Each Holder, by accepting a Note, agrees to be bound by all of
the terms and provisions of the Indenture, as the same may be amended from time
to time in accordance with its terms.
B-2
(5) Redemption. The Notes will be redeemable, at the Company's option, in
whole at any time or in part from time to time, on and after March 15, 2007,
upon not less than 30 nor more than 60 days' notice, at the following Redemption
Prices (expressed as percentages of the principal amount thereof) if redeemed
during the twelve-month period commencing on March 15 of the years set forth
below, plus, in each case, accrued interest, if any, thereon to the date of
redemption:
Year Percentage
2007............................ 104.800%
2008............................ 103.200%
2009............................ 101.600%
2010 and thereafter............. 100.000%
At any time, or from time to time, on or prior to March 15, 2005, the
Company may, at its option, use all or a portion of the net cash proceeds of one
or more Equity Offerings to redeem up to 35% of the aggregate principal amount
of the Notes originally issued at a redemption price equal to 109.600% of the
aggregate principal amount of the Notes to be redeemed, plus accrued interest,
if any, thereon to the date of redemption; provided, however, that at least 65%
of the aggregate principal amount of Notes originally issued remains outstanding
immediately after giving effect to any such redemption. In order to effect the
foregoing redemption with the proceeds of any Equity Offering, the Company shall
make such redemption not more than 60 days after the consummation of any such
Equity Offering.
(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 such Holder's registered address. Notes in denominations
larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of the
Notes called for redemption shall have been deposited with the Paying Agent for
redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
(7) Offers to Purchase. Sections 4.15 and 4.16 of the Indenture provide
that, after certain Asset Sales (as defined in the Indenture) and upon the
occurrence of a Change of Control (as defined in the Indenture), and subject to
further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
(8) Denominations; Transfer; Exchange. The Notes are in registered form,
without coupons, and (except Notes issued as payment of Interest) in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption.
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(9) Persons Deemed Owners. The registered Holder of a Note shall be treated
as the owner of it for all purposes.
(10) Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for one year, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
(11) Discharge Prior to Redemption or Maturity. If the Company at any time
deposit with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption and
comply with the other provisions of the Indenture relating thereto, the Company
will be discharged from certain provisions of the Indenture and the Notes
(including certain covenants, including, under certain circumstances, its
obligation to pay the principal of and interest on the Notes but without
affecting the rights of the Holders to receive such amounts from such deposit).
(12) Amendment; Supplement; Waiver. Subject to certain exceptions set forth
in the Indenture, the Indenture or the Notes may be amended or supplemented with
the written consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding, and any past Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of not less than a majority in aggregate principal amount
of the Notes then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Indenture or the Notes to, among
other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, comply
with any requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the TIA or comply with Article Five of the
Indenture or make any other change that does not adversely affect the rights of
any Holder of a Note.
(13) Restrictive Covenants. The Indenture imposes certain limitations on
the ability of the Company and the Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of their Capital
Stock or certain Indebtedness, make certain Investments, create or incur liens,
enter into transactions with Affiliates, create dividend or other payment
restrictions affecting Restricted Subsidiaries, issue Preferred Stock of their
Restricted Subsidiaries, and on the ability of the Company and their Restricted
Subsidiaries to merge or consolidate with any other Person or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of the
Company's and their Restricted Subsidiaries' assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions. Pursuant to Section 4.06 of the Indenture, the
Company must annually report to the Trustee on compliance with such limitations.
(14) Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.
(15) Defaults and Remedies. Except as set forth in the Indenture, if an
Event of Default occurs and is continuing, the Trustee or the Holders of not
less than 25% in principal amount of Notes then outstanding may declare all the
Notes to be due and payable in the manner, at the time and with the effect
provided in the Indenture. Holders of Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee is not obligated to
enforce the Indenture or
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the Notes unless it has received indemnity reasonably satisfactory to it.
The Indenture permits, subject to certain limitations therein provided, Holders
of a majority in aggregate principal amount of the Notes then outstanding to
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Notes notice of any continuing Default or Event of
Default (except a Default in payment of principal or interest when due, for any
reason or a Default in compliance with Article Five of the Indenture) if it
determines that withholding notice is in their interest.
(16) Trustee Dealings with the Company. 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 the Company, their Subsidiaries or their respective
Affiliates as if it were not the Trustee.
(17) No Recourse Against Others. No partner, director, officer, employee or
stockholder, as such, of the Company or any Subsidiary Guarantor, as such, shall
have any liability for any obligations of the Company or any Subsidiary
Guarantor under the Notes, the Indenture, the Guarantees or the Registration
Rights Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
(18) Guarantees. This Note will be entitled to the benefits of certain
Guarantees, if any, made for the benefit of the Holders. Reference is hereby
made to the Indenture for a statement of the respective rights, limitations of
rights, duties and obligations thereunder of the Subsidiary Guarantors, the
Trustee and the Holders.
(19) Authentication. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
(20) Governing Law. This Note and the Indenture shall be governed by and
construed in accordance with the laws of the State of New York, as applied to
contracts made and performed within the State of New York, without regard to
principles of conflict of laws. Each of the parties hereto agrees to submit to
the jurisdiction of the courts of the State of New York in any action or
proceeding arising out of or relating to this Note.
(21) Abbreviations and Defined Terms. Customary abbreviations may be used
in the name of a Holder of a Note or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
(22) CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture, which has the text of this Note.
Requests may be made to: Magnum Hunter Resources, Inc., 000 Xxxx Xxx Xxxxxxx
Xxxx., Xxxxx 0000, Xxxxxx, Xxxxx 00000.
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ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
(Print or type name, address and zip code and social security or tax ID
number of assignee)
and irrevocably appoint _______________________________________, agent to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.
Dated: _____________________ Signed:___________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:___________________________________________
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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 4.15 or Section 4.16 of the Indenture, check the appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$
-------------------
Dated: _________________
---------------------------------------------------
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in every
particular without alteration
or enlargement or any change
whatsoever and be guaranteed.
Signature Guarantee: _____________________________
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EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
[ ], [ ]
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Corporate Trust and Agency Services
Ladies and Gentlemen:
In connection with our proposed purchase of 9.60 % Senior Notes due 2012
(the "Notes") of Magnum Hunter Resources, Inc. (the "Company"), we confirm that:
1. We understand that any subsequent transfer of the Notes is subject to
certain restrictions and conditions set forth in the indenture relating to the
Notes (the "Indenture") and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Notes except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act"), and all applicable State securities laws.
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold within the United States or to, or for the account or benefit of, U.S.
persons except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Notes, we will do so only (i) to the Company
or any subsidiary thereof, (ii) inside the United States in accordance with Rule
144A under the Securities Act to a "qualified institutional buyer" (as defined
in Rule 144A promulgated under the Securities Act) in compliance with Rule 144A
under the Securities Act, (iii) inside the United States to "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act), that, prior to such transfer, furnishes (or has furnished on its behalf by
a U.S. broker-dealer) to the Trustee (as defined in the Indenture) a signed
letter containing certain representations and agreements relating to the
restrictions on transfer of the Notes (the form of which letter can be obtained
from the Trustee), (iv) in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel if the Company so requests), (v) outside the United States in accordance
with Rule 904 of Regulation S promulgated under the Securities Act, (vi)
pursuant to the exemption from registration provided by Rule 144 under the
Securities Act (if available), or (vii) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing any of the Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein.
C-1
3. We understand that, on any proposed resale of any Notes, we will be
required to furnish to the Trustee, and the Company such certification, legal
opinions and other information as the Trustee and Magnum may reasonably require
to confirm that the proposed sale complies with the foregoing restrictions. We
further understand that the Notes purchased by us will bear a legend to the
foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or their investment, as the case may be.
5. We are acquiring the Notes purchased by us for our account or for one or
more accounts (each of which is an institutional "accredited investor") as to
each of which we exercise sole investment discretion.
You and the Company and others are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
--------------------------
Name:
Title:
C-2
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
[ ], [ ]
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Corporate Trust and Agency Services
Re: Magnum Hunter Resources, Inc. (the "Company") 9.60 % Senior Notes due
2012 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $[ ] aggregate principal amount of
the Notes, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United States;
(2) either (a) at the time the buy offer was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States, or (b) the
transaction was executed in, on or through the facilities of a designated
offshore securities market and neither we nor any person acting on our behalf
knows that the transaction has been prearranged with a buyer in the United
States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903 or Rule 904 of Regulation S, as
applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions applicable
to the Notes.
You, the Company and counsel for the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
D-1
Very truly yours,
[Name of Transferor]
By:
-----------------------
Authorized Signature
D-2
EXHIBIT E
GUARANTEE
For value received, the undersigned hereby unconditionally guarantees, as
principal obligor and not only as a surety, to the Holder of this Note the cash
payments in United States dollars of principal of, premium, if any, and interest
on this Note (and including Additional Interest payable thereon) in the amounts
and at the times when due and interest on the overdue principal, premium, if
any, and interest, if any, of this Note, if lawful, and the payment or
performance of all other obligations of the Company under the Indenture or the
Notes, to the Holder of this Note and the Trustee, all in accordance with and
subject to the terms and limitations of this Note, Article Twelve of the
Indenture and this Guarantee. This Guarantee will become effective in accordance
with Article Twelve of the Indenture and its terms shall be evidenced therein.
The validity and enforceability of any Guarantee shall not be affected by the
fact that it is not affixed to any particular Note. Capitalized terms used but
not defined herein shall have the meanings ascribed to them in the Indenture
dated as of March 15, 2002, among Magnum Hunter Resources, Inc., a Nevada
corporation, the Subsidiary Guarantors and Bankers Trust Company as trustee (the
"Trustee"), as amended or supplemented (the "Indenture").
The obligations of the undersigned to the Holders of Notes and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article Twelve of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS
OF LAW. Each Subsidiary Guarantor hereby agrees to submit to the jurisdiction of
the courts of the State of New York in any action or proceeding arising out of
or relating to this Guarantee.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
E-1
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused its Guarantee to
be duly executed.
Date: ____________________
[NAME OF SUBSIDIARY GUARANTOR],
as Guarantor
By:
---------------------------------
Name:
Title:
E-2
EXHIBIT F
Form of Certificate To Be Delivered
in Connection with Certain Transfers
[ ], [ ]
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Corporate Trust and Agency Services
Re: Magnum Hunter Resources, Inc. (the "Company") 9.60 % Senior Notes due
2012 (the "Notes")
Ladies and Gentlemen:
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date of the declaration by the Commission of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) [ ], the undersigned confirms that it has not utilized any
general solicitation or general advertising in connection with the transfer:
[Check One]
(1) __ to the Company or a subsidiary thereof; or
(2) __ pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
(3) __ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended) that
has furnished to the Trustee a signed letter containing certain representations
and agreements (the form of which letter can be obtained from the Trustee); or
(4) __ outside the United states to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act of 1933, as amended; or
(5) __ pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933, as amended; or
(6) __ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) __ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
F-1
and unless the box below is checked, the undersigned confirms that such
Note is not being transferred to an "affiliate" of the Company as defined in
Rule 144 under the Securities Act of 1933, as amended (an "Affiliate"):
[ ] The transferee is an Affiliate of the Company.
Unless one of the items 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 unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.17 of the Indenture
shall have been satisfied; provided, however, that if item (3), (4), (5) or (7)
is checked, the Company or the Trustee may require, prior to registering any
such transfer of the Notes, in their sole discretion, such written legal
opinions, certifications (including an investment letter in the case of box (3)
or (4)) and other information as the Trustee or the Company have reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, as amended.
Dated: _____________________ Signed:__________________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:___________________________________________
TO BE COMPLETED BY PURCHASER IF (2) 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 of 1933, as amended and
is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: __________________ ________________________________________
NOTICE: To be executed by an executive officer
F-2
