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EXHIBIT 4.1
EXECUTION COPY
THE HOUSTON EXPLORATION COMPANY
8-5/8% SENIOR SUBORDINATED NOTES DUE 2008
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INDENTURE
Dated as of March 2, 1998
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The Bank of New York
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Trustee
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TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE............................... 1
Section 1.1. Definitions................................................................ 1
Section 1.2. Other Definitions.......................................................... 24
Section 1.3. Incorporation by Reference of Trust
Indenture Act............................................................ 24
Section 1.4. Rules of Construction...................................................... 24
Section 1.5. Compliance Certificates and Opinions....................................... 25
Section 1.6. Form of Documents Delivered To Trustee..................................... 26
Section 1.7. Acts of Holders............................................................ 26
ARTICLE 2
THE NOTES................................................ 28
Section 2.1. Form and Dating............................................................ 28
Section 2.2. Execution and Authentication............................................... 29
Section 2.3. Registrar and Paying Agent................................................. 29
Section 2.4. Paying Agent to Hold Money in Trust........................................ 30
Section 2.5. Holder Lists............................................................... 30
Section 2.6. Transfer and Exchange...................................................... 30
Section 2.7. Replacement Notes.......................................................... 45
Section 2.8. Outstanding Notes.......................................................... 45
Section 2.9. Treasury Notes............................................................. 46
Section 2.10. Temporary Notes............................................................ 46
Section 2.11. Cancellation............................................................... 46
Section 2.12. Defaulted Interest......................................................... 46
Section 2.13. CUSIP Numbers.............................................................. 47
ARTICLE 3
REDEMPTION AND PREPAYMENT....................................... 48
Section 3.1. Applicability of Article................................................... 48
Section 3.2. Election to Redeem; Notice to Trustee...................................... 48
Section 3.3. Selection by Trustee of Notes to Be
Redeemed................................................................. 48
Section 3.4. Notice of Redemption....................................................... 48
Section 3.5. Deposit of Redemption Price................................................ 49
Section 3.6. Notes Payable on Redemption Date........................................... 50
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Section 3.7. Notes Redeemed in Part..................................................... 50
Section 3.8. Optional Redemption........................................................ 50
Section 3.9. Mandatory Redemption....................................................... 51
Section 3.10. Offer to Purchase by Application of
Excess Proceeds.......................................................... 51
ARTICLE 4
COVENANTS................................................ 54
Section 4.1. Payment of Principal, Premium and
Interest................................................................. 54
Section 4.2. Maintenance of Office or Agency............................................ 54
Section 4.3. Money for Security Payments to be Held
in Trust................................................................. 55
Section 4.4. Reports.................................................................... 56
Section 4.5. Statement as to Compliance; Notice of
Default.................................................................. 57
Section 4.6. Payment of Taxes and Other Claims.......................................... 58
Section 4.7. Limitation on Liens........................................................ 58
Section 4.8. Corporate Existence........................................................ 58
Section 4.9. Offer to Repurchase Upon Change of
Control.................................................................. 59
Section 4.10. Asset Sales................................................................ 61
Section 4.11. Limitation on Restricted Payments.......................................... 63
Section 4.12. Limitation on Incurrence of Indebtedness
and Issuance of Preferred Stock.......................................... 66
Section 4.13. Transactions with Affiliates............................................... 69
Section 4.14. Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries........................................ 70
Section 4.15. Limitations on Guarantees of
Indebtedness by Restricted Subsidiaries
....................................................................... 70
Section 4.16. Limitation on Other Senior Subordinated
Indebtedness............................................................. 72
Section 4.17. Limitation as to Unrestricted
Subsidiaries............................................................. 72
Section 4.18. Line of Business........................................................... 72
Section 4.19. Effectiveness of Covenants................................................. 72
ARTICLE 5
SUCCESSORS................................................ 73
Section 5.1. Merger, Consolidation, or Sale of All or
Substantially All Assets................................................. 73
Section 5.2. Successor Corporation Substituted.......................................... 74
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ARTICLE 6
DEFAULTS AND REMEDIES......................................... 74
Section 6.1. Events of Default and Notice Thereof....................................... 74
Section 6.2. Acceleration of Maturity; Rescission....................................... 76
Section 6.3. Other Remedies............................................................. 77
Section 6.4. Waiver of Past Defaults.................................................... 77
Section 6.5. Control by Majority........................................................ 77
Section 6.6. Limitation on Suits........................................................ 78
Section 6.7. Rights of Holders of Notes to Receive
Payment.................................................................. 78
Section 6.8. Collection Suit by Trustee................................................. 78
Section 6.9. Trustee May File Proofs of Claim........................................... 78
Section 6.10. Priorities................................................................. 79
Section 6.11. Undertaking for Costs...................................................... 80
Section 6.12. Waiver of Stay, Extension of Usury Laws.................................... 80
ARTICLE 7
TRUSTEE................................................. 80
Section 7.1. Duties of Trustee.......................................................... 80
Section 7.2. Rights of Trustee.......................................................... 81
Section 7.3. Individual Rights of Trustee............................................... 82
Section 7.4. Trustee's Disclaimer....................................................... 82
Section 7.5. Notice of Defaults......................................................... 83
Section 7.6. Reports by Trustee to Holders of the
Notes.................................................................... 83
Section 7.7. Compensation and Indemnity................................................. 83
Section 7.8. Replacement of Trustee..................................................... 84
Section 7.9. Successor Trustee by Xxxxxx, Etc........................................... 85
Section 7.10. Eligibility; Disqualification.............................................. 86
Section 7.11. Preferential Collection of Claims
Against the Company...................................................... 86
Section 7.12. Rights of Holders with Respect to Time,
Method and Place......................................................... 86
Section 7.13. Trustee's Application for Instructions
from the Company......................................................... 86
ARTICLE 8
DEFEASANCE AND COVENANT DEFEASANCE..................................... 87
Section 8.1. Option to Effect Defeasance or Covenant
Defeasance............................................................... 87
Section 8.2. Defeasance and Discharge................................................... 87
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Section 8.3. Covenant Defeasance........................................................ 87
Section 8.4. Conditions to Defeasance or Covenant
Defeasance............................................................... 88
Section 8.5. Deposited Money and U.S. Government
Obligations to be Held in Trust; Other
Miscellaneous Provisions................................................. 89
Section 8.6. Reinstatement.............................................................. 90
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER.................................... 91
Section 9.1. Without Consent of Holders of Notes........................................ 91
Section 9.2. With Consent of Holders of Notes........................................... 91
Section 9.3. Compliance with TIA........................................................ 93
Section 9.4. Revocation and Effect of Consents.......................................... 93
Section 9.5. Notation on or Exchange of Notes........................................... 94
Section 9.6. Trustee to Sign Amendments, Etc............................................ 94
ARTICLE 10
SUBORDINATION............................................... 94
Section 10.1. Agreement to Subordinate................................................... 94
Section 10.2. Liquidation; Dissolution; Bankruptcy....................................... 94
Section 10.3. Default on Designated Senior Debt.......................................... 95
Section 10.4. Acceleration of Securities................................................. 95
Section 10.5. When Distribution Must Be Paid Over........................................ 96
Section 10.6. Notice by Company.......................................................... 96
Section 10.7. Subrogation................................................................ 97
Section 10.8. Relative Rights............................................................ 97
Section 10.9. Subordination May Not Be Impaired by
Company.................................................................. 97
Section 10.10. Distribution or Notice to Representative
........................................................................ 98
Section 10.11. Rights of Trustee and Paying Agent......................................... 98
Section 10.12. Authorization to Effect Subordination...................................... 98
ARTICLE 11
SATISFACTION AND DISCHARGE...................................... 99
Section 11.1. Satisfaction and Discharge of Indenture.................................... 99
Section 11.2. Application of Trust Money.................................................100
ARTICLE 12
MISCELLANEOUS..............................................100
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Section 12.1. Conflict of Any Provision of Indenture
with TIA.................................................................100
Section 12.2. Notices....................................................................100
Section 12.3. Communication by Holders of Notes with
Other Holders of Notes...................................................102
Section 12.4. Certificate and Opinion as to Conditions
Precedent................................................................102
Section 12.5. Legal Holidays.............................................................102
Section 12.6. No Personal Liability of Directors,
Officers, Employees and Stockholders.....................................102
Section 12.7. Governing Law..............................................................103
Section 12.9. No Adverse Interpretation of Other
Agreements...............................................................104
Section 12.10. Successors and Assigns.....................................................104
Section 12.11. Severability...............................................................104
Section 12.12. Counterpart Originals......................................................104
Section 12.13. Table of Contents, Headings, Etc...........................................104
ANNEXES
Annex A Specified Property
EXHIBITS
Exhibit A-1 Form of Restricted Definitive Note, IAI Global
Note, Regulation S Global Note and Rule 144 A
Global Note
Exhibit A-2 Form of Unrestricted Note
Exhibit B Form of Certificate of Transfer
Exhibit C Form of Certificate of Exchange
Exhibit D Form of Certificate from Acquiring Institutional
Accredited Investor
Exhibit E Form of Supplemental Indenture to be Delivered by
Subsidiary Guarantors
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CROSS-REFERENCE TABLE(*)
Trust Indenture
Act Section Indenture Section
310(a)(1)................................................................................... 7.10
(a)(2)................................................................................... 7.10
(a)(3)................................................................................... N.A.
(a)(4)................................................................................... N.A.
(a)(5)................................................................................... 7.10
(b)...................................................................................... 7.10
(c)...................................................................................... N.A.
311(a)...................................................................................... 7.11
(b)...................................................................................... 7.11
(c)...................................................................................... N.A.
312(a)...................................................................................... 11.3
(b)...................................................................................... 11.3
(c)...................................................................................... 11.3
313(a)...................................................................................... 7.6
(b)(1)................................................................................... N.A.
(b)(2)................................................................................... 7.6; 7.7
(c)...................................................................................... 7.6; 10.2
(d)...................................................................................... 7.6
314(a)...................................................................................... 4.4; 11.2
(b)...................................................................................... N.A.
(c)(1)................................................................................... 11.4
(c)(2)................................................................................... 11.4
(c)(3)................................................................................... N.A.
(d)...................................................................................... N.A.
(f)...................................................................................... N.A.
315(a)...................................................................................... 7.1
(b)...................................................................................... 7.5; 11.2
(c)...................................................................................... 7.1
(d)...................................................................................... 7.1
(e)...................................................................................... 6.11
316(a)(last sentence)....................................................................... 2.9
(a)(1)(A)................................................................................ 6.5
(a)(1)(B)................................................................................ 6.4
(a)(2)................................................................................... N.A.
(b)...................................................................................... 6.7
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*/ This Cross-Reference Table is not part of the Indenture.
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317(a)(1)................................................................................... 6.8
(a)(2)................................................................................... 6.9
(b)...................................................................................... 2.4
318(a)...................................................................................... 11.1
(b)...................................................................................... N.A.
(c)...................................................................................... 11.1
N.A. means not applicable.
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INDENTURE dated as of March 2, 1998 between The Houston
Exploration Company, a Delaware corporation, and The Bank of New York, a New
York banking corporation, as trustee (the "Trustee"). The Company and the
Trustee agree as follows for the benefit of each other and for the equal and
ratable benefit of the Holders of the 8-5/8% Senior Subordinated Notes due 2008
(the "Notes").
ARTICLE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS.
Set forth below are certain defined terms used in this
Indenture.
"Acquired Indebtedness" means, with respect to any specified
Person, (i) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Restricted Subsidiary or is designated
a Restricted Subsidiary of such specified Person, including, without limitation,
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Restricted Subsidiary of such
specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Adjusted Consolidated Net Tangible Assets" means (without
duplication), as of the date of determination, (A) the sum of (i) discounted
future net cash flows from proved oil and gas reserves of the Company and its
Restricted Subsidiaries, calculated in accordance with Commission guidelines
(before any federal or state income tax), as estimated by independent petroleum
engineers as of a date no earlier than the date of the Company's latest annual
consolidated financial statements (or, in the case that the date of
determination is after the end of the first fiscal quarter of the Company's
fiscal year, as estimated by the Company's engineers as of a date no earlier
than the end of the most recent fiscal quarter, which estimates shall be
confirmed in writing by a report by independent petroleum engineers in
accordance with Commission guidelines in the event of a Material Change if the
amount of Adjusted Consolidated Net Tangible Assets is required to be computed
under this Indenture), (ii) the Net Working Capital on a date no earlier than
the date of the Company's latest consolidated annual or quarterly financial
statements, and (iii)
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with respect to each other tangible asset of the Company or its Restricted
Subsidiaries, the greater of (a) 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, and (b) (A) the appraised value, as estimated
by a qualified independent appraiser, of such other tangible asset, as of a date
no earlier than the date that is three years prior to the date of determination
(or such later date on which the Company shall have a reasonable basis to
believe that there has occurred a material decrease in value since the
determination of such appraised value), minus (B) minority interests.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the voting securities of a
Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or
co-registrar.
"Agent Members" means members of, or participants in, the
Depository.
"Applicable Procedures" means applicable procedures of the
Depository, Euroclear or Cedel Bank, as the case may be.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets (including, without limitation, by way of a sale and
leaseback, including any disposition by means of a merger, consolidation or
similar transaction and including the issuance, sale or other transfer of any of
the capital stock of any Restricted Subsidiary of such person) other than to the
Company or to any of its Wholly Owned Subsidiaries (including the receipt of
proceeds of insurance paid on account of the loss of or damage to any asset and
awards of compensation for any asset taken by condemnation, eminent domain or
similar proceeding, but excluding
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the receipt of proceeds of business interruption insurance or environmental
damage insurance or similar types of policies) that have a fair market value (as
determined in good faith by the Board of Directors) in excess of $1.0 million or
for net cash proceeds in excess of $1.0 million; and (ii) the issuance of Equity
Interests in any Restricted Subsidiary or Unrestricted Subsidiary or the sale of
any Equity Interests in any Restricted Subsidiary or Unrestricted Subsidiary, in
each case, in one or a series of related transactions, provided, that
notwithstanding the foregoing, the term "Asset Sale" shall not include: (a) the
sale, lease, conveyance, disposition or other transfer of all or substantially
all of the assets of the Company, as permitted pursuant to Section 5.1 hereof,
(b) the abandonment, farmout, lease or sublease of developed or undeveloped oil
and gas properties in the ordinary course of business, (c) a transfer of assets
by the Company to a Wholly Owned Subsidiary of the Company or by a Wholly Owned
Subsidiary of the Company to the Company or to another Wholly Owned Subsidiary
of the Company, (d) an issuance of Equity Interests by a Wholly Owned Subsidiary
of the Company to the Company or to another Wholly Owned Subsidiary of the
Company, (e) the making of Permitted Investments, (f) any cash dividend,
distribution, Investment or payment made pursuant to the first or second
paragraph of Section 4.11 hereof, (g) the trade or exchange by the Company or
any Restricted Subsidiary of the Company of any oil and gas property or interest
therein owned or held by the Company or such Restricted Subsidiary for any oil
and gas property or interest therein owned or held by another Person, including
any cash or Cash Equivalents necessary in order to achieve an exchange of
equivalent value; provided that any such cash or Cash Equivalents received by
the Company or such Restricted Subsidiary will be subject to the provisions
described in the second paragraph of Section 4.10 hereof, which the Board of
Directors of the Company determine in good faith to be of approximately
equivalent value, (h) the sale or transfer of hydrocarbons or other mineral
products or surplus or obsolete equipment in the ordinary course of business,
(i) the sale of oil and gas properties in connection with tax credit
transactions complying with ss. 29 of the Code or (j) the sale or transfer
(whether or not in the ordinary course of business) of any oil and gas property
or interest therein to which no proved reserves are attributable at the time of
such sale or transfer.
"Attributable Debt" in respect of a sale and leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction,
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determined in accordance with GAAP) of the obligation of the lessee for net
rental payments during the remaining term of the lease included in such sale and
leaseback transaction (including any period for which such lease has been
extended or may, at the option of the lessor, be extended, to the extent the
lease payments during such extension period are required to be capitalized on a
balance sheet as a liability in accordance with GAAP).
"Bankruptcy Law" means Title 11, U.S. Code or any similar
foreign, federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the
Company or any authorized committee of the board of directors.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Broker-Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at such time be required to be capitalized on a balance
sheet in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of a limited liability company or similar
entity, any membership or similar interests therein, (iii) in the case of an
association or business entity, any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, (iv) in the
case of a partnership, partnership interests (whether general or limited) and
(v) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Cash Equivalents" means (i) securities issued or directly and
fully guaranteed or insured by the United States government or any agency or
instrumentality thereof having
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maturities of not more than one year from the date of acquisition, (ii)
certificates of deposit and eurodollar time deposits with maturities of one year
or less from the date of acquisition, bankers' acceptances with maturities not
exceeding one year and overnight bank deposits, in each case with any domestic
commercial bank having capital and surplus in excess of $500 million, (iii)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (i) and (ii) above entered into
with any financial institution meeting the qualifications specified in clause
(ii) above, (iv) commercial paper having a rating of at least P1 from Xxxxx'x
(or its successor) or a rating of at least A1 from S&P (or its successor) and
(v) investments in money market or other mutual funds all of whose assets
comprise securities of types described in clauses (i) through (iv) above.
"Change of Control" means the occurrence of any of the
following: (i) any "Person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than the Permitted Holders, is or becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have a "beneficial ownership" of all
shares that any such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 35% or more of the total voting power of the Voting Stock of the
Company, provided however that the Permitted Holders beneficially own (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, in the aggregate a lesser percentage of the total voting power of
the Voting Stock of the Company than such other person (for purposes of this
definition, such other person shall be deemed to beneficially own any Voting
Stock of a specified corporation held by a parent corporation, if such other
person is the beneficial owner (as defined above), directly or indirectly, or
more than 35% of the voting power of the Voting Stock of such parent corporation
and the Permitted Holders beneficially own (as defined in this proviso),
directly or indirectly, in the aggregate a lesser percentage of the Voting Stock
of such parent corporation); (ii) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole to any "Person" or
group of related Persons (a "Group") (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) other than
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the Permitted Holders; (iii) the adoption of a plan relating to the liquidation
or dissolution of the Company; or (iv) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Company
was approved by a vote of a majority of the directors of the Company then still
in office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in office.
"Code" means the Internal Revenue Code of 1986, as
amended, or any successor thereto.
"Company" means The Houston Exploration Company, a Delaware
corporation, and any successor thereto pursuant to Section 5.1 hereof.
"Commission" means the Securities and Exchange
Commission.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company (i) by its Chairman, a Vice Chairman,
its President or a Vice President and (ii) by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee;
provided, however, that such written request or order may be signed by any two
of the officers listed in clause (i) above in lieu of being signed by one of
such officers listed in such clause (i) and one of the officers listed in clause
(ii) above.
"Consolidated Cashflow" means, with respect to the Company and
its Restricted Subsidiaries for any period, the sum of, without duplication, (i)
the Consolidated Net Income for such period, plus (ii) to the extent deducted
from Consolidated Net Income for such period, the Fixed Charges for such period,
plus (iii) Consolidated Income Taxes for such period, plus (iv) consolidated
depreciation, amortization, depletion and other non-cash charges of the Company
and its Restricted Subsidiaries required to be reflected as expenses on the
books and records of the Company, and (v) excluding the impact of foreign
currency translations. Notwithstanding the foregoing, Consolidated Income Taxes
of, and the depreciation, depletion and amortization and
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other non-cash charges of, a Restricted Subsidiary of a Person shall be added to
Consolidated Net Income to compute Consolidated Cashflow only to the extent that
the Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person and only if a corresponding amount would
be permitted at the date of determination to be dividended to the Company by
such Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders.
"Consolidated Income Taxes" means, with respect to any Person
for any period, taxes imposed upon such Person or other payments required to be
made by such Person by any governmental authority which taxes or other payments
are calculated by reference to the income or profits of such Person or such
Person and its Subsidiaries (to the extent such income or profits were included
in computing Consolidated Net Income for such period), regardless of whether
such taxes or payments are required to be remitted to any governmental
authority.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (i) the Net Income (but not loss) of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent Person or a
Restricted Subsidiary thereof, (ii) the Net Income of, or any dividends or other
distributions from, any Unrestricted Subsidiary, to the extent otherwise
included, shall be excluded, whether or not distributed to the Company or one or
its Restricted Subsidiaries, (iii) the Net Income of any Restricted Subsidiary
shall be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(which has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its stockholders, (iv) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date
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of such acquisition shall be excluded, and (v) the cumulative effect of a change
in accounting principles shall be excluded.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 12.2 hereof or such other address as
to which the Trustee may give notice to the Company.
"Credit Agreement" means, collectively, (i) that certain
Credit Agreement, as in effect on the date hereof, by and among the Company, the
lenders that may be from time to time parties thereto and Chase Bank of Texas,
National Association (formerly known as Texas Commerce Bank National
Association), as agent, as the foregoing may from time to time be amended,
renewed, supplemented or otherwise modified at the option of the parties
thereto, including increases in the principal amount thereof; and (ii) any
successors to or replacements of (as designated by the Board of Directors of the
Company in its sole judgment, and evidenced by a resolution) such Credit
Agreement, as such successors or replacements may from time to time be amended,
renewed, supplemented, modified or replaced, including increases in the
principal amount thereof.
"Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
"Default" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default.
"Definitive Notes" means Restricted Definitive Notes and
Unrestricted Definitive Notes.
"Depository" means, with respect to any Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.3
hereof as the Depository with respect to such Notes, until a successor shall
have been appointed and become such Depository pursuant to the applicable
provision of this Indenture, and, thereafter, "Depository" shall mean or include
such successor.
"Designated Senior Debt" means (i) the Credit Agreement and
(ii) any Senior Debt permitted under this Indenture which, at the date of
determination, has an aggregate principal amount outstanding of, or under which,
at the date of determination, the holders thereof are committed to lend up to,
at least $25 million
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and is specifically designated by the Company in the instrument evidencing or
governing such Senior Debt as "Designated Senior Debt" for purposes of this
Indenture.
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable) or upon the happening of any event, matures or is
mandatorily redeemable (other than in connection with a Change of Control or
Asset Sale) for any consideration other than Capital Stock, pursuant to a
sinking fund obligation or otherwise, is convertible or is exchangeable for
Indebtedness or Disqualified Stock or redeemable (other than in connection with
a Change of Control or Asset Sale) for any consideration other than Capital
Stock at the option of the holder thereof, in whole or in part, in each case on
or prior to the date that is 91 days after (x) the date on which the Notes
mature or (y) on which there are no Notes outstanding.
"Dollar-Denominated Production Payments" means production
payment obligations recorded as liabilities in accordance with GAAP, together
with all undertakings and obligations in connection therewith.
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any public or private offering (other
than on Form S-8 or any other form relating to securities issuable under any
benefit plan of the Company) of Equity Interests other than Disqualified Stock
of the Company or any successor by merger to the Company.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Exchange Offer" means the offer that may be made by the
Company pursuant to the Registration Rights Agreement to exchange new Notes for
Notes.
"Existing Indebtedness" means the Indebtedness of the Company
and its Restricted Subsidiaries (other than Indebtedness
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18
under the Credit Agreement) in existence on the date hereof, until such amounts
are repaid.
"Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued (including, without limitation, amortization of original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges incurred in
respect of letters of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Hedging Obligations), and (ii) the consolidated interest
expense of such Person and its Restricted Subsidiaries that was capitalized
during such period, and (iii) any interest expense on Indebtedness of another
Person that is guaranteed by such Person or one of its Restricted Subsidiaries
or secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries (whether or not such guarantee or Lien is called upon), and (iv)
the product of (a) all dividend payments, whether or not in cash (other than any
such non-cash dividend in the form of Equity Interests which do not provide for
the payment of cash dividends prior to any stated maturity of the principal of
the Notes), on any series of preferred stock of any such Person or one of its
Restricted Subsidiaries payable to a party other than the Company or a Wholly
Owned Subsidiary, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state,
provincial and local statutory tax rate of such Person, expressed as a decimal,
in each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person
for any period, the ratio of the Consolidated Cashflow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the Company or
any of its Restricted Subsidiaries incurs, assumes, guarantees, redeems or
repays any Indebtedness (other than the incurrence or repayment of revolving
credit borrowings used for working capital, except to the extent that a
repayment is accompanied by a permanent reduction in revolving credit
commitments) or issues preferred stock subsequent to the commencement of the
four-quarter reference period for which the Fixed Charge Coverage Ratio is being
calculated but prior to
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19
the date on which the event for which the calculation of the
Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed
Charge Coverage Ratio shall be calculated giving pro forma effect to such
incurrence, assumption, guarantee, redemption or repayment of Indebtedness, or
such issuance or redemption of preferred stock, as if the same had occurred at
the beginning of the applicable four-quarter reference period. For purposes of
making the computation referred to above, (i) acquisitions that have been made
by the Company or any of its Restricted Subsidiaries, including through mergers
or consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date shall be deemed to have occurred on the first day
of the four-quarter reference period and shall give pro forma effect to the
Consolidated Cashflow and Indebtedness and preferred stock of the Person which
is the subject of any such acquisition and any cost savings or expense
reductions attributable at the time of such computation or to be attributable in
the future to such acquisition, shall be included in such computation, to the
extent that such adjustments would be permitted under Article 11 of Regulation
S-X and Consolidated Cashflow for such reference period shall be calculated
without giving effect to clause (iv) of the proviso set forth in the definition
of Consolidated Net Income, (ii) the net proceeds of Indebtedness incurred or
Disqualified Stock issued by the referent Person pursuant to the first paragraph
of Section 4.12 hereof during the four-quarter reference period or subsequent to
such reference period and on or prior to the Calculation Date shall be deemed to
have been received by the referent Persons or any of its Restricted Subsidiaries
on the first day of the four-quarter reference period and applied to its
intended use on such date, (iii) the Consolidated Cashflow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, and
(iv) the Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the referent Person
or any of its Restricted Subsidiaries following the Calculation Date.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public
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Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect on the date hereof.
"Global Note" means, individually and collectively, the
Regulation S Global Note, the Rule 144A Global Note, the IAI Global Note and the
Unrestricted Global Note.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States is
pledged.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate or currency exchange swap
agreements, interest rate or currency exchange cap agreements and interest rate
or currency exchange collar agreements and (ii) other agreements or arrangements
designed to protect such Person against fluctuations in currency exchange or
interest rates.
"Holder" means a Person in whose name a Note is
registered on the Registrar's books.
"IAI Global Note" means a permanent Global Note in the form of
Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depository or its nominee, representing Restricted Notes offered and sold to
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) in the United States of America.
"Indebtedness" means, with respect to any Person, without
duplication, any indebtedness of such Person, whether or not contingent, in
respect of borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or banker's acceptances or representing Capital Lease Obligations or in
respect of any Production Payment or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than in the case of letters
of credit and Hedging Obligations) would appear as a liability upon a balance
-12-
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sheet of such Person prepared in accordance with GAAP, as well as all
indebtedness of others secured by a Lien on any asset of such Person (whether or
not such indebtedness is assumed by such Person), the maximum fixed repurchase
price of Disqualified Stock issued by such Person in each case, if held by any
Person other than the Company or a Wholly Owned Subsidiary of the Company,
obligations of such Person in respect of production imbalances, Attributable
Debt of such Person, and, to the extent not otherwise included, the guarantee by
such Person of any indebtedness of any other Person; provided, however that
indebtedness shall not include gas balancing liabilities incurred in the
ordinary course of business and consistent with past practice.
"Indenture" means this Indenture, as amended or
supplemented from time to time.
"Initial Purchasers" mean Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation, Chase Securities Inc., Howard, Weil,
Labouisse, Xxxxxxxxxx Incorporated, PaineWebber Incorporated and
Salomon Brothers Inc.
"Institutional Accredited Investor" means an institutional and
"accredited investor" as defined in Rule 501(a) (1), (2), (3) or (7) of the
Securities Act.
"Interest Payment Date" means each January 1 and July 1,
whether or not such day is a Business Day.
"interest" means all interest payable with respect to the
Notes, including, without limitation, Liquidated Damages, if any.
"Investment Grade Status," with respect to the Company, shall
occur when the Notes receive a rating of "BBB-" or higher from S&P or a rating
of "Baa3" or higher from Moody's.
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the forms
of direct or indirect loans (including guarantees of Indebtedness or other
obligations, but excluding trade credit), advances or capital contributions
(excluding commission, travel, relocation and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities and all other items that are or would be classified as
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investments on a balance sheet prepared in accordance with GAAP; provided that
(i) Hedging Obligations, (ii) hedging agreements that such Person entered into
in the ordinary course of business in the oil and gas industry for the purpose
of protecting against fluctuations in oil or natural gas prices and otherwise in
compliance with this Indenture, (iii) endorsements of negotiable instruments and
documents in the ordinary course of business, (iv) Permitted Marketing
Transactions and (v) an acquisition of assets, Equity Interests or other
securities by the Company for consideration consisting of common equity
securities of the Company shall not be deemed to be an Investment. If the
Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Equity Interests of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, such
entity is no longer a Subsidiary of the Company, the Company shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Subsidiary not sold or
disposed of.
"Issue Date" means the closing date for the sale and original
issuance of the Notes under this Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which
federal offices or banking institutions in the City of New York, in the city of
the Corporate Trust Office of the Trustee, or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday, payment may be made on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
-14-
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statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Liquidated Damages" means all interest payable pursuant to
Paragraph 2 of the Restricted Definitive Notes, the Regulation S Global Notes,
the Rule 144A Global Notes and the IAI Global Notes.
"Material Change" means an increase or decrease of more than
20% 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 its Restricted Subsidiaries calculated in accordance
with Commission guidelines (before any federal or state income tax); provided,
however, that the following will be excluded from the Material Change
calculation: (i) 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, (ii) 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, and (iii) any
disposition of properties existing at the beginning of such quarter that have
been disposed of as provided in Section 4.10 hereof.
"Maturity" when used in respect to any Note means the date on
which the principal of (and premium, if any) and interest on such Note becomes
due and payable as therein or herein provided, whether at Stated Maturity or the
applicable Redemption Date and whether by declaration of acceleration, call for
redemption or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP, and before reduction
for non-cash preferred stock dividends, excluding, however, (i) any gain or
loss, together with any related provision for taxes on such gain or loss,
realized in connection with (a) any Asset Sale (including, without limitation,
dispositions pursuant to sale and leaseback transactions) or (b) the disposition
of any securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries and (ii) any extraordinary or nonrecurring gain or loss, together
with any
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24
related provision for taxes on such extraordinary or nonrecurring gain or loss.
"Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP and net of any amounts required to be applied to the repayment of
Indebtedness (other than Indebtedness under any Senior Debt) secured by a Lien
on the asset or assets that were the subject of such Asset Sale.
"Net Working Capital" means (i) all current assets of the
Company and its Restricted Subsidiaries excluding cash and Cash Equivalents,
minus (ii) all current liabilities of the Company and its Restricted
Subsidiaries, except current liabilities included in Indebtedness.
"Non-Recourse Debt" means Indebtedness (i) as to which neither
the Company nor any of its Restricted Subsidiaries (a) provides any guarantee or
credit support of any kind (including any undertaking, guarantee, indemnity,
agreement or instrument that would constitute Indebtedness) or (b) is directly
or indirectly liable (as a guarantor or otherwise), (ii) no default with respect
to which (including any rights that the Holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default under such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity and (iii) the explicit terms of which provide that
there is no recourse against any of the assets of the Company or its Restricted
Subsidiaries.
"Non-U.S. Person" shall mean a Person who is not a U.S.
Person, as such term is defined in Regulation S.
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"Notes" means the Company's 8-5/8% Senior Subordinated Notes
due 2008 issued in compliance with this Indenture.
"Note Custodian" means the Trustee, as custodian with respect
to the Global Notes, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
Liquidated Damages, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"Offering Memorandum" means that certain offering memorandum
with respect to the Notes, dated February 25, 1998.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice President of such Person.
"Officers' Certificate" means a certificate signed on behalf
of the Company by two officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company that meets the requirements set
forth in Section 1.5.
"Oil and Gas Business" means (i) the acquisition, exploration,
exploitation, development, operation or disposition of interests in oil, gas or
other hydrocarbon properties, (ii) the gathering, marketing, treating,
processing, storage, selling, transporting or refining of any production from
such interests or properties, (iii) any business relating to or arising from
exploration for or development, production, gathering, marketing, treatment,
processing, storage, sale, transportation or refining of oil, gas and other
minerals and products produced in association therewith or (iv) any activity
that is ancillary or necessary or desirable to facilitate the activities
described in clauses (i) through (iii) of this definition.
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of or counsel for the Company, and who shall be acceptable to
the Trustee. Each such opinion shall include the statements provided for in TIA
Section 314(e) to the extent applicable.
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26
"Pari Passu Indebtedness" means Indebtedness that ranks pari
passu in right of payment to the Notes.
"Permitted Holders" means THEC Holding Corp., The Brooklyn
Union Gas Company, KeySpan Energy Corporation and (to the extent it has
consummated a merger, consolidation or other business combination transaction
with KeySpan Energy Corporation) Long Island Lighting Company, and any successor
or Affiliate of any such
Person.
"Permitted Investments" means (a) any Investments in the
Company or in a Restricted Subsidiary of the Company that is engaged in the Oil
and Gas Business; (b) any Investments in Cash Equivalents; (c) Investments by
the Company or any Restricted Subsidiary of the Company in a Person if as a
result of such Investment (i) such Person becomes a Wholly Owned Subsidiary of
the Company and such Person is engaged in the Oil and Gas Business or (ii) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company
or a Wholly Owned Subsidiary of the Company that is engaged in the Oil and Gas
Business; (d) Investments made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.10 hereof; (e) Investments by the Company or any of its
Restricted Subsidiaries in cash in an aggregate amount not to exceed $10.0
million outstanding at any one time; (f) loans and advances to employees in the
ordinary course of business for bona fide business purposes; (g) stock,
obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any of its Subsidiaries
or in satisfaction of judgments or pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of any debtor; (h) any
operating agreements, joint ventures, partnership agreements, working interests,
royalty interests, mineral leases, processing agreements, farm-in agreements,
farm-out agreements, contracts for the sale, transportation or exchange of oil
and natural gas, unitization agreements, pooling arrangements, area of mutual
interest agreements, production sharing agreements or other similar or customary
agreements, transactions, properties, interests, or arrangements, and
Investments and expenditures in connection therewith or pursuant thereto, in
each case made or entered into in the ordinary course of the Oil and Gas
Business, excluding, however, Investments in corporations; (i) accounts
receivable
-18-
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created or acquired, and prepaid expenses arising, in the ordinary course of
business; (j) Investments existing on the date hereof; and (k) the incurrence,
assumption or creation of Hedging Obligations and hedging arrangements that the
Company or a Restricted Subsidiary of the Company enter into in the ordinary
course of business in the oil and gas industry for the purpose of protecting its
production against fluctuations in oil or natural gas prices and otherwise in
compliance with this Indenture.
"Permitted Liens" means (i) Liens securing Indebtedness of a
Subsidiary or Liens securing Senior Debt that is outstanding on the date of
issuance of the Notes and Liens securing Senior Debt that is permitted by the
terms of this Indenture to be incurred; (ii) Liens in favor of the Company or
any Restricted Subsidiary; (iii) Liens on property existing at the time of
acquisition thereof by the Company or any Subsidiary of the Company and Liens on
property or assets of a Subsidiary existing at the time it became a Subsidiary,
provided that such Liens were in existence prior to the contemplation of the
acquisition and do not extend to any assets other than the acquired property or
the property of the acquired Subsidiary; (iv) Liens incurred or deposits made in
the ordinary course of business in connection with workers' compensation,
unemployment insurance or other kinds of social security, or to secure the
payment or performance of tenders, statutory or regulatory obligations, surety
or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business (including lessee or operator
obligations under statutes, governmental regulations or instruments related to
the ownership, exploration and production of oil, gas and minerals on state or
federal lands or waters); (v) Liens existing on the date hereof; (vi) Liens for
taxes, assessments or governmental charges or claims that are not yet delinquent
or that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (vii) statutory liens of landlords, mechanics, suppliers,
vendors, warehousemen, carriers or other like Liens arising in the ordinary
course of business; (viii) pre-judgment liens and judgment Liens not giving rise
to an Event of Default so long as any appropriate legal proceeding that may have
been duly initiated for the review of such judgment shall not have been finally
terminated or the period within which such proceeding may be initiated shall not
have expired; (ix) Liens on, or related to, properties or assets to
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secure all or part of the costs incurred in the ordinary course of the Oil and
Gas Business for the exploration, drilling, development, production, processing,
transportation, marketing, storage or operation thereof; (x) Liens on pipeline
or pipeline facilities that arise under operation of law; (xi) Liens arising
under operating agreements, joint venture agreements, partnership agreements,
oil and gas leases, farm-in agreements, farm-out agreements, division orders,
contracts for the sale, transportation or exchange of oil or natural gas,
unitization and pooling declarations and agreements, area of mutual interest
agreements and other agreements that are customary in the Oil and Gas Business;
(xii) Liens reserved in oil and gas mineral leases for bonus or rental payments
and for compliance with the terms of such leases; (xiii) Liens securing the
Notes; (xiv) Liens constituting survey exceptions, encumbrances, easements, and
reservations of, and rights to others for, rights-of-way, zoning and other
restrictions as to the use of real properties, and minor defects of title which,
in the case of any of the foregoing, do not secure the payment of borrowed
money, and in the aggregate do not materially adversely affect the value of the
assets of the Company and its Restricted Subsidiaries, taken as a whole, or
materially impair the use of such properties for the purposes of which such
properties are held by the Company or such subsidiaries; and (xv) Liens not
otherwise permitted by clauses (i) through (xiv) that are incurred in the
ordinary course of business of the Company or any Subsidiary with respect to
obligations that do not exceed $5 million at any one time outstanding.
"Permitted Marketing Transaction" means (i) a transaction in
which the Company or any Subsidiary of the Company either (a) establishes a
position using New York Mercantile Exchange Crude Oil or Natural Gas Futures
contracts to purchase hydrocarbons for future delivery to it or (b) purchases or
commits to purchase hydrocarbons for future delivery to it, and contemporaneous
with such purchase transaction either (1) establishes one or more positions
using New York Mercantile Exchange Crude Oil or Natural Gas Futures contracts to
resell at a date subsequent to such delivery date or (2) enters into a contract
with a Person to resell at a date subsequent to such delivery date, a similar
aggregate quantity and quality of hydrocarbons as so purchased by the Company or
such Subsidiary, as applicable, at an aggregate price greater than the
Indebtedness incurred for the hydrocarbons so purchased by the Company or such
Subsidiary or (ii) any other purchase by the
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Company or any Subsidiary of the Company of hydrocarbons for which the Company
or such Subsidiary has contracts to sell.
"Permitted Refinancing Indebtedness" means any Indebtedness of
the Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the original principal
amount (or then current accreted value, if applicable) of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the amount
of reasonable expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date at least as late as the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by the
Company or by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company, or other business entity or government or agency or
political subdivision thereof (including any subdivision or ongoing business of
any such entity or substantially all of the assets of any such entity,
subdivision or business).
"Private Placement Legend" means the legend set forth in
Section 2.6(g)(i)(A) to be placed on all Notes issued under this Indenture
except as permitted pursuant to Section 2.6(g)(i)(B).
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"Production Payments" means Dollar-Denominated Production
Payments and Volumetric Production Payments, collectively.
"Purchase Money Lien" means a Lien granted on an asset or
property to secure a Purchase Money Obligation permitted to be incurred under
this Indenture and incurred solely to finance the purchase, or the cost of
construction or improvement, of such asset or property; provided however, that
such Lien encumbers only such asset or property and is granted within 180 days
of such acquisition.
"Purchase Money Obligations" of any Person means any
obligations of such Person to any seller or any other Person incurred or assumed
to finance the purchase, or the cost of construction or improvement, of real or
personal property to be used in the business of such Person or any of its
Restricted Subsidiaries in an amount that is not more than 100% of the cost, or
fair market value, as appropriate, of such property, and incurred within 90 days
after the date of such acquisition (excluding accounts payable to trade
creditors incurred in the ordinary course of business).
"QIB" means a "Qualified Institutional Buyer" under Rule
144A.
"Redemption Date," when used with respect to any Note to be
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price," when used with respect to any Note to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 2, 1998, by and among the Company and the Initial
Purchasers, as such agreement may be amended, modified or supplemented from time
to time.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the December 15 or June 15 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date.
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31
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Note" means a permanent global Note in
the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depository or its nominee, representing Notes sold in reliance on
Regulation S.
"Representative" means the indenture trustee or other trustee,
client or representative for any senior Indebtedness.
"Repurchase Offer" means an offer made by the Company to
purchase all or any portion of a Holder's Notes pursuant to the provisions
described under Sections 4.9 or 4.10.
"Responsible Officer," when used with respect to the Trustee,
means any officer of the Trustee with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Definitive Notes" means Notes that are in the form
of the Notes attached hereto as Exhibit A-1, that do not include the information
called for by footnotes 1 and 2 thereof.
"Restricted Global Notes" means the Regulation S Global
Notes, the Rule 144A Global Notes and the IAI Global Notes.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Notes" means Restricted Global Notes or
Restricted Definitive Notes.
"Restricted Period" means the 40-day restricted period as
defined in Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of
the referent Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the
Securities Act.
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"Rule 144A Global Note" means a permanent global note in the
form of Exhibit A-1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depository or its nominee, representing Notes sold in reliance on Rule
144A.
"Rule 903" means Rule 903 promulgated under the
Securities Act.
"Rule 904" means Rule 904 promulgated under the
Securities Act.
"S&P" means Standard and Poor's Ratings Group.
"Securities Act" means the Securities Act of 1933, as
amended.
"Senior Debt" means (i) indebtedness of the Company under or
in respect of the Credit Agreement, whether for principal, interest (including
interest accruing after the filing of a petition initiating any proceeding
pursuant to any bankruptcy law, whether or not the claim for such interest is
allowed as a claim in such proceeding), reimbursement obligations, fees,
commissions, expenses, indemnities or other amounts, and (ii) any other
Indebtedness permitted under the terms of this Indenture, unless the instrument
under which such Indebtedness is incurred expressly provides that it is on a
parity with or subordinated in right of payment to the Notes. Notwithstanding
anything to the contrary in the foregoing sentence, Senior Debt will not include
(v) Equity Interests, (w) any liability for federal, state, local or other taxes
owned or owing by the Company, (x) any Indebtedness of the Company to any of its
Subsidiaries or other Affiliates, (y) any trade payables or (z) any Indebtedness
that is incurred in violation of this Indenture. Senior Debt of a Subsidiary
Guarantor has a correlative meaning (including interest accruing after the
filing of a petition initiating any proceeding pursuant to any bankruptcy law,
whether or not the claim for such interest is allowed as a claim in such
proceeding).
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Exchange Act, as such Regulation is in effect on the
date hereof.
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"Special Record Date" means a date fixed by the Trustee for
the payment of any Defaulted Interest pursuant to Section 2.12.
"Specified Property" means the items set forth on Annex
A hereto.
"Stated Maturity," when used with respect to any Note or any
installment of principal thereof or interest thereon, means the date specified
in such Note as the fixed date on which the principal of such Note or such
installment of principal or interest is due and payable.
"Subordinated Note Obligations" means any principal of,
premium, if any, and interest and Liquidated Damages on, the Notes and any other
payment obligations of the Company in respect of the Notes (including any
obligation to repurchase the Notes).
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other equity interests (including
partnership interests) entitles (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person
or (ii) one or more Subsidiaries of such Person.
"Subsidiary Guarantee" means any guarantee of the obligations
of the Company under this Indenture and the Notes by a Restricted Subsidiary in
accordance with the provisions of this Indenture pursuant to a supplemental
indenture substantially in the form attached hereto as Exhibit E.
"Subsidiary Guarantor" means any Restricted Subsidiary
that incurs a Subsidiary Guarantee.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA, except as provided in Section 9.3 hereof.
"Trustee" means the party named as such above unless and until
a successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means such successor.
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"Unrestricted Definitive Note" means Notes that are in the
form of the Notes attached hereto as Exhibit A-2 that do not include the
information called for by footnotes 1 and 2 thereof.
"Unrestricted Global Note" means a permanent global Note that
contains the paragraph referred to in footnote 1 and the additional schedule
referred to in footnote 2 to the form of the Note attached hereto as Exhibit
A-2, and that is deposited with or on behalf of and registered in the name of
the Depository.
"Unrestricted Notes" means the Unrestricted Global Notes
and Unrestricted Definitive Notes.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company which at the time of determination shall be an Unrestricted Subsidiary
(as designated by the Board of Directors of the Company, as provided below) and
(ii) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the
Company may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary or a Person becoming a Subsidiary through
merger or consolidation or Investment therein) to be an Unrestricted Subsidiary
only if (a) such Subsidiary does not own any Capital Stock of, or own or hold
any Lien on any property of, any other Subsidiary of the Company which is not a
Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted
Subsidiary; (b) all the Indebtedness of such Subsidiary and its Subsidiaries
shall, at the date of designation, and will at all times thereafter, consist of
Non-Recourse Debt; (c) the Company certifies that such designation complies with
the limitations of the covenant contained in Section 4.11 hereof; (d) such
Subsidiary, either alone or in the aggregate with all other Unrestricted
Subsidiaries, does not operate, directly or indirectly, all or substantially all
of the business of the Company and its Subsidiaries; (e) such Subsidiary does
not, directly or indirectly, own any Indebtedness of or Equity Interest in, and
has no investments in, the Company or any Restricted Subsidiary; and (f) such
Subsidiary is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (1) to subscribe
for additional Equity Interests of such Person or (2) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results. Any such designation by the Board of
Directors of the Company shall be evidenced to the Trustee by filing with the
Trustee a resolution of the Board of Directors
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of the Company giving effect to such designation and an Officers' certificate
certifying that such designation complied with the foregoing conditions. If, at
any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of
such Subsidiary shall be deemed to be incurred as of such date. The Board of
Directors of the Company may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, that immediately after giving effect to such
designation, no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof and the Company could incur
at least $1.00 of additional Indebtedness (excluding Permitted Indebtedness)
pursuant to the first paragraph of Section 4.12 hereof on a pro forma basis
taking into account such designation.
"Volumetric Production Payments" means production payment
obligations recorded as deferred revenue in accordance with GAAP, together with
all undertakings and obligations in connection therewith.
"Voting Stock" of any entity means all classes of Capital
Stock of such entity then outstanding and normally entitled to vote in the
election of directors or all interests in such entity with the ability to
control the management or actions of such entity.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares or shares
required by applicable law to be held by third parties) shall at the time be
owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.
Unrestricted Subsidiaries shall not be included in the definition of Wholly
Owned Subsidiary for any purposes of this Indenture.
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SECTION 1.2. OTHER DEFINITIONS.
Term Defined in
Section
"Act" ......................................................................... 1.7
"Affiliate Transaction"........................................................ 4.13
"Asset Sale Offer"............................................................. 4.10
"Cedel Bank"................................................................... 2.1
"Covenant Defeasance".......................................................... 8.3
"Defaulted Interest"........................................................... 2.12
"Defeasance"................................................................... 8.2
"DTC".......................................................................... 2.3
"Euroclear".................................................................... 2.1
"Event of Default"............................................................. 6.1
"Paying Agent"................................................................. 2.3
"QIB".......................................................................... 2.1
"Registrar".................................................................... 2.3
"Restricted Payments".......................................................... 4.11
"Successor Company"............................................................ 5.1
SECTION 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE
ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee;
"OBLIGOR" on the Notes means the Company and any successor
obligors upon the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined
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by Commission rule under the TIA have the meanings so assigned to them.
SECTION 1.4. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in
the plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) references to sections of or rules under the
Securities Act shall be deemed to include substitute,
replacement or successor sections or rules adopted by
the Commission from time to time.
SECTION 1.5. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture (including any covenant
compliance with which constitutes a condition precedent) relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion (other than the certificates
required by Section 4.5(a)) with respect to compliance with a
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condition or covenant provided for in this Indenture shall comply with the
provisions of TIA 314(e) and shall include:
(a) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation as is necessary
to enable him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 1.6. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representation
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
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know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 1.7. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to TIA Section 315) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved in any reasonable manner that the
Trustee deems sufficient.
(c) The ownership of Notes shall be proved by a register
kept by the Registrar.
(d) If the Company shall solicit from the Holders any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of such Holders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Company shall have no obligation to do so. Notwithstanding TIA
Section 316(c), any such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not more than 30 days
prior to the first
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solicitation of Holders generally in connection therewith and no later than the
date such solicitation is completed.
If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Notes then
outstanding have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for this
purpose the Notes then outstanding shall be computed as of such record date;
provided that no such request, demand, authorization, direction, notice,
consent, waiver or other Act by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
(e) Any request, demand, authorization, direction,
notice, consent, waiver or other Act by the Holder of any Note shall bind every
future Holder of the same Note or the Holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, suffered or omitted to be done by the Trustee, any
Paying Agent or the Company in reliance thereon, whether or not notation of such
action is made upon such Note.
ARTICLE 2
THE NOTES
SECTION 2.1. FORM AND DATING.
The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibits A-1 and A-2 attached hereto. The
Notes may have notations, legends or endorsements
required by law, stock exchange rule or usage, as designated by the Company or
its counsel. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
The Notes initially offered and sold in reliance on Rule 144A
shall be issued initially in the form of a Rule 144A Global Note. Notes
initially offered and sold in reliance on Regulation
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S shall be issued initially in the form of the Regulation S Global Note. Notes
offered and sold to Institutional Accredited Investors in the United States of
America shall be issued in the form of an IAI Global Note. Each of the
Restricted Global Notes shall be deposited on behalf of the purchasers of the
Notes represented thereby with the Trustee, at its New York office, as custodian
for the Depository, and registered in the name of the Depository or the nominee
of the Depository. The Regulation S Global Notes shall be registered in the name
of the Depository or the nominee of the Depository for the accounts of
designated agents holding on behalf of Euroclear or Cedel Bank, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
Restricted Period shall be terminated upon the receipt by the Trustee of (i) a
written certificate from the Depository or the Note Custodian, together with
copies of certificates from Euroclear and Cedel Bank certifying that they have
received certification of non-United States beneficial ownership of 100% of the
aggregate principal amount of the Regulation S Global Note, and (ii) an
Officers' Certificate from the Company to the effect set forth in Section
12.4(a) hereof.
Notes issued in global form shall be substantially in the form
of Exhibits A-1 or A-2 attached hereto (including the Global Note Legend and the
"Schedule of Exchanges in the Global Note" attached thereto). Notes issued in
definitive form shall be substantially in the form of Exhibit A-1 or A-2
attached hereto (but without the Global Note Legend and without the "Schedule of
Exchanges of Interests in the Global Note" attached thereto). Each Global Note
shall represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the Note Custodian, at the direction of
the Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.6 hereof.
The provisions of the "Operating Procedures of the Euroclear
System" and "Terms and Conditions Governing Use of Euroclear" and the "General
Terms and Conditions of Cedel Bank" and
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"Customer Handbook" of Cedel Bank shall be applicable to transfers of beneficial
interests in the Regulation S Global Notes that are held by the Agent Members
through Euroclear or Cedel Bank.
SECTION 2.2. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed
by two Officers, authenticate Notes for original issue up to the aggregate
principal amount stated in the Notes. The aggregate principal amount of Notes
outstanding at any time may not exceed such amount except as provided in Section
2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
SECTION 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall
promptly notify the Trustee in writing of the name and address of any Agent not
a party to this
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Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium, if any, or interest on the Notes, and will
promptly notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.
SECTION 2.5. HOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA ss. 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).
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SECTION 2.6. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. A Global Note may
not be transferred as a whole except by the Depository to a nominee of the
Depository, by a nominee of the Depository to the Depository or to another
nominee of the Depository, or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository. All Global Notes
will be exchanged by the Company for Definitive Notes if (i) DTC (x) notifies
the Company that it is unwilling or unable to continue as Depository for the
Global Notes and the Company thereupon fails to appoint a successor depositary
within 90 days or (y) has ceased to be a clearing agency registered under the
Exchange Act, (ii) the Company, at its option, notifies the Trustee in writing
that it elects to cause the issuance of Definitive Notes in exchange for the
Global Notes or (iii) there shall have occurred and be continuing a Default or
an Event of Default with respect to the Notes. Upon the occurrence of either of
the preceding events in (i), (ii) or (iii) above, Definitive Notes shall be
issued in such names as the Depository shall instruct the Trustee. Global Notes
also may be exchanged or replaced, in whole or in part, as provided in Sections
2.7 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or
in lieu of, a Global Note or any portion thereof, pursuant to Section 2.7 or
2.10 hereof, shall be authenticated and delivered in the form of, and shall be,
a Global Note. A Global Note may not be exchanged for another Note other than as
provided in this Section 2.6(a), however, beneficial interests in a Global Note
may be transferred and exchanged as provided in Section 2.6(b), (c) or (f)
hereof.
(b) Transfer and Exchange of Beneficial Interests in
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depository, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
described in the Private Placement Legend to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Notes also shall
require compliance with subparagraph (i) below as well as one or more of the
other following subparagraphs as applicable:
(i) Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of
beneficial interests, the transferor of such beneficial
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interest must deliver to the Registrar either (A) (1) a written order
from an Agent Member to the Depository in accordance with the
Applicable Procedures directing the Depository to credit or cause to be
credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures
containing information regarding the Agent Member account to be
credited with such increase or (B) (1) a written order from an Agent
Member given to the Depository in accordance with the Applicable
Procedures directing the Depository to cause to be issued a Definitive
Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given by the Depository to the Registrar
containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above. Upon an Exchange Offer by the Company in
accordance with Section 2.6(f) hereof, the requirements of this Section
2.6(b)(i) shall be deemed to have been satisfied upon receipt by the
Registrar of the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for transfer
or exchange of beneficial interests in Global Notes contained in this
Indenture, the Notes and otherwise applicable under the Securities Act,
the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.6(h) hereof.
(ii) Transfer of Beneficial Interests Among Restricted
Global Notes. (a) The following provisions shall apply with respect to
any proposed transfer of the 144A Global Note or the IAI Global Note to
a Restricted Global Note prior to the two-year anniversary of the Issue
Date:
(1) a transfer of the 144A Global Note
or the IAI Global Note or a beneficial interest
therein to a QIB shall be made upon the delivery of a
certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(2) a transfer of the 144A Global Note
or the IAI Global Note or a beneficial interest
therein to
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an Institutional Accredited Investor shall be made
upon delivery of a certificate in the form of Exhibit
B hereto, including the certifications in item (3)
thereof; and
(3) a transfer of the 144A Global Note or
the IAI Global Note or a beneficial interest therein
to a Non-U.S. Person shall be made upon delivery of a
certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof.
The following provisions shall apply with respect to
any proposed transfer of a Regulation S Global Note prior to the
expiration of the Restricted Period:
(i) a transfer of a Regulation S Global Note
or a beneficial interest therein to a QIB shall be
made upon the delivery of a certificate in the form
of Exhibit B hereto, including the certifications in
item (1) thereof;
(ii) a transfer of a Regulation S Global
Note or a beneficial interest therein to an
Institutional Accredited Investor shall be made upon
delivery of a certificate in the form of Exhibit B
hereto, including the certifications in item (3)
thereof; and
(iii) a transfer of a Regulation S Global
Note or a beneficial interest therein to a Non-U.S.
Person shall be made upon the delivery of a
certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof.
After the expiration of the Restricted Period, interests in a
Regulation S Global Note may be transferred without requiring certification.
(iii) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in an Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form
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of a beneficial interest in an Unrestricted Global Note if the exchange
or transfer complies with the requirements of clause (i) above and:
(A) such exchange or transfer is effected pursuant
to the Exchange Offer in accordance with the Registration
Rights Agreement and the holder of the beneficial interest to
be transferred, in the case of an exchange, or the
transferee, in the case of a transfer, is not (1) a
Broker-Dealer, (2) a Person participating in the distribution
of the Notes issued in the Exchange Offer or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a)
thereof;
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4)
thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form
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reasonably acceptable to the Registrar to the effect
that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on
transfer contained herein and in the Private
Placement Legend are not required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.2 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraph
(B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to, Persons who take delivery thereof in the form
of a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests in
Global Notes for Definitive Notes.
(i) If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest
proposes to exchange such beneficial interest for a Restricted
Definitive Note, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;
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(C) if such beneficial interest is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a)
thereof;
(E) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates and Opinion
of Counsel required by item (3)(d) thereof, if applicable, and
Exhibit D;
(F) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Note to be reduced accordingly pursuant to Section 2.6(h)
hereof, and the Company shall execute and the Trustee shall authenticate and
deliver or cause to be delivered to the Person designated in the instructions a
Restricted Definitive Note in the appropriate principal amount. Any Restricted
Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.6(c) shall be registered in such name or
names and in such
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authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the Depository
and the Agent Member. The Trustee shall deliver such Restricted Definitive Notes
to the Persons in whose names such Notes are so registered. Any Restricted
Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.6(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained therein.
(ii) Notwithstanding 2.6(c)(i) hereof, a holder of a
beneficial interest in a Restricted Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note or may transfer
such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Notes issued in the
Exchange Offer or (3) a Person who is an affiliate (as defined
in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for an Unrestricted
Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the
certifications in item (1)(b) thereof;
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(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such
holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form
reasonably acceptable to the Company, to the effect
that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on
transfer contained herein and in the Private
Placement Legend are not required in order to
maintain compliance with the Securities Act.
(iii) If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest
for an Unrestricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note, then, upon satisfaction of the conditions
set forth in Section 2.6(b)(i) hereof, the Trustee shall cause the
aggregate principal amount of the applicable Unrestricted Global Note
to be reduced accordingly pursuant to Section 2.6(h) hereof, and
the Company shall execute and the Trustee shall authenticate and
deliver or cause to be delivered to the Person designated in the
instructions an Unrestricted Definitive Note in the appropriate
principal amount. Any Unrestricted Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.6(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct
the Registrar through instructions from the Depository and the Agent
Member. The Trustee shall deliver or cause to be delivered such
Unrestricted Definitive Notes to the Persons in whose names such Notes
are so registered. Any Unrestricted Definitive Note issued in exchange
for a beneficial interest pursuant to this section 2.6(c)(iii) shall
not bear the Private Placement Legend. A beneficial interest in an
Unrestricted Global Note cannot be exchanged for a Restricted
Definitive Note or transferred to a Person who takes delivery thereof
in the form of a Restricted Definitive Note.
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(d) Transfer and Exchange of Definitive Notes for
Beneficial Interests in Global Note.
(i) If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act,
a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof; or
(D) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor pursuant
to an exemption from the registration requirements of the
Securities Act, certificates to the effect set forth in
Exhibit B hereto, including the certifications in item (3)
thereof and Exhibit D;
the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the Regulation S Global Note
and in the case of clause (D) above, the IAI Global Note.
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(ii) A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note
if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, is not (1) a
Broker-Dealer, (2) a Person participating in the distribution
of the Notes issued in the Exchange Offer or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for
a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in
item (1)(c) thereof;
(2) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of
a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in
item (4) thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form
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reasonably acceptable to the Company to the effect
that such exchange or transfer is in compliance with
the Securities Act, that the restrictions on transfer
contained herein and in the Private Placement Legend
are not required in order to maintain compliance with
the Securities Act, and such Restricted Definitive
Notes are being exchanged or transferred in
compliance with any applicable blue sky securities
laws of any State of the United States.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.6(d)(ii), the Trustee shall cancel the Restricted Definitive
Notes and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Note.
(iii) A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Unrestricted Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of the Unrestricted Global Note.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.2 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraphs
(ii)(B), (ii)(D) or (iii) above.
(e) Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.6(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the
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Registrar the Definitive Notes duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such Xxxxxx or by his attorney, duly authorized in writing. In addition, the
requesting Holder shall provide any additional certifications, documents and
information, as applicable, pursuant to the provisions of this Section 2.6(e).
(i) Restricted Definitive Notes may be transferred to
and registered in the name of Persons who take delivery thereof if the
Registrar receives the following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in
item (2) thereof; and
(C) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(ii) Any Restricted Definitive Note may be exchanged by
the Holder thereof for an Unrestricted Definitive Note or transferred
to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, is not (1) a
Broker-Dealer, (2) a Person participating in the distribution
of the Notes issued in the Exchange Offer or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company;
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(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto,
including the certifications in item (l)(d) thereof;
(2) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form
reasonably acceptable to the Company to the effect
that such exchange or transfer is in compliance with
the Securities Act, that the restrictions on transfer
contained herein and in the Private Placement Legend
are not required in order to maintain compliance with
the Securities Act, and such Restricted Definitive
Note is being exchanged or transferred in compliance
with any applicable blue sky securities laws of any
State of the United States.
(iii) A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Note. Upon receipt of a request for such
a transfer, the Registrar shall register the Unrestricted Definitive
Notes pursuant to the instructions
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from the Holder thereof. Unrestricted Definitive Notes cannot be
exchanged for or transferred to Persons who take delivery thereof in
the form of a Restricted Definitive Note.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer
in accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an authentication order in accordance with Section 2.2, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by persons that
are not (x) Broker-Dealers, (y) Persons participating in the distribution of the
Notes issued in the Exchange Offer or (z) Persons who are Affiliates (as defined
in Rule 144) of the Company and accepted for exchange in the Exchange Offer and
(ii) Unrestricted Definitive Notes in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes accepted for exchange in the
Exchange Offer. Concurrent with the issuance of such Notes, the Trustee shall
cause the aggregate principal amount of the applicable Restricted Global Notes
to be reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and deliver or cause to be delivered to the Persons designated by
the Holders of Definitive Notes so accepted Unrestricted Definitive Notes in the
appropriate principal amount.
(g) Legends. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B)
below, each Global Note and each Definitive Note (and
all Notes issued in exchange therefor or substitution
thereof) shall bear the legend in substantially the
following form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL
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INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A
"QIB"), (B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),(2),(3) OR (7) OF REGULATION
D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENT OF RULE 144A UNDER THE SECURITIES ACT, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULES 903 AND 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY)
OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO
THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS."
(B) Notwithstanding the foregoing, any
Unrestricted Global Note or Unrestricted Definitive
Note issued pursuant to subparagraphs (b)(iii),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii),
(e)(iii) or (f) to this Section 2.6 (and all Notes
issued in exchange therefor or substitution thereof)
shall not bear the Private Placement Legend.
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(ii) Global Note Legend. Each Global Note shall bear a
legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.7 OF THE
INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN
PART PURSUANT TO SECTION 2.6(a) OF THE INDENTURE, (III) THIS GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed, repurchased
or cancelled in whole and not in part, each such Global Note shall be returned
to or retained and cancelled by the Trustee in accordance with Section 2.11
hereof. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note or for
Definitive Notes, the principal amount of Notes represented by such Global Note
shall be reduced accordingly and an endorsement shall be made on such Global
Note, by the Trustee or by the Depository at the direction of the Trustee, to
reflect such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note, by
the Trustee or by the Depository at the direction of the Trustee, to reflect
such increase.
(i) General Provisions Relating to Transfers and
Exchanges.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Global
Notes and Definitive Notes upon receipt of a Company Order or at the
Registrar's request.
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(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.7, 4.9, 4.10 and 9.5
hereof).
(iii) The Registrar shall not be required to register
the transfer of or exchange any Note selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in
part.
(iv) All Global Notes and Definitive Notes issued upon
any registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such registration
of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange Notes during a period beginning
at the opening of business 15 days before the day of any selection of
Notes for redemption under Section 3.3 hereof and ending at the close
of business on the day of selection, (B) to register the transfer of or
to exchange any Note so selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part or (C)
to register the transfer of or to exchange a Note between a record date
and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
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(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.2
hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.6 to effect a transfer or exchange may be submitted by
facsimile.
SECTION 2.7. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the
Company and the Trustee and the Company receive evidence to their satisfaction
of the destruction, loss or theft of any Note, the Company shall issue and the
Trustee, upon the written order of the Company signed by two Officers of the
Company, shall authenticate a replacement Note if the Trustee's and the
Company's requirements are met. If required by the Trustee or the Company, an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Trustee and the Company to protect the Company, the Trustee, any Agent
and any authenticating agent from any loss that any of them may suffer if a Note
is replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
SECTION 2.8. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section 2.9
hereof, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
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If the principal amount of any Note is considered paid under
Section 4.1 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.9. TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by an Affiliate of the Company, shall be considered as though
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 that a Responsible Officer of the Trustee has been informed of by the
Company as being so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until permanent Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a written order
of the Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of permanent Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate permanent Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall return
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cancelled Notes to the Company. The Company may not issue new Notes to replace
Notes that it has paid or that have been delivered to the Trustee for
cancellation.
SECTION 2.12. DEFAULTED INTEREST.
Interest on any Note which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Note is registered at the close of business on the Regular
Record Date for such interest.
Any interest on any Note which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date and interest
on such defaulted interest at the applicable interest rate borne by the Notes,
to the extent lawful (such defaulted interest (and interest thereon) herein
collectively called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the relevant Regular Record Date by virtue of having been such
Holder; and such Defaulted Interest shall be paid by the Company to the Persons
in whose names the Notes are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall give the Trustee at least 15 days'
written notice (unless a shorter period is acceptable to the Trustee for its
convenience) of the amount of Defaulted Interest proposed to be paid on each
Note and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held by the Trustee in
trust for the benefit of the Persons entitled to such Defaulted Interest as in
this subsection provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall not be more than 15 days
and not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date. In the name and at the expense of the Company, the Trustee shall cause
notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Registrar, not less than 10 days prior to such
Special Record Date. Notice of the proposed
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payment of such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Default Interest shall be paid to the Persons in whose
names the Notes are registered at the close of business on such Special Record
Date.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 2.13. CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.1. APPLICABILITY OF ARTICLE.
Redemption of Notes at the election of the Company shall be
made in accordance with this Article 3.
SECTION 3.2. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes pursuant to
Section 3.8 shall be evidenced by a Board Resolution. In case of any redemption
at the election of the Company, the Company shall, at least 45 but not more than
60 days prior to the Redemption Date fixed by it (unless a shorter notice period
shall be satisfactory to the Trustee for its convenience), notify the Trustee of
such Redemption Date and of the principal amount of Notes to be redeemed.
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SECTION 3.3. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time,
selection of such Notes for redemption or purchase, as the case may be, shall be
made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which such Notes are listed, or, if
such Notes are not so listed, on a pro rata basis, by lot or by such other
method as the Trustee shall deem fair and appropriate (and in such manner as
complies with applicable legal requirements); provided that no Notes of $1,000
or less shall be redeemed in part.
The Trustee shall promptly notify the Company and the
Registrar in writing of the Notes selected for redemption and, in the case of
any Notes selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of Notes shall relate,
in the case of any Note redeemed or to be redeemed only in part, to the portion
of the principal amount of such Note which has been or is to be redeemed.
SECTION 3.4. NOTICE OF REDEMPTION.
Notices of redemption shall be mailed by first class mail,
postage prepaid, at least 30 but not more than 60 days before the Redemption
Date to each Holder of Notes to be redeemed at such Xxxxxx's registered address.
If any Note is to be redeemed in part only, any notice of redemption that
relates to such Note shall state the portion of the principal amount thereof
that has been or is to be redeemed.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Notes then outstanding are to be
redeemed, the identification (and, in the case of a Note to be redeemed in part,
the principal amount) of the particular Notes to be redeemed;
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(d) that on the Redemption Date, the Redemption Price will
become due and payable upon each such Note or portion thereof, and that (unless
the Company shall default in payment of the Redemption Price) interest thereon
shall cease to accrue on or after said date;
(e) the places or places where such Notes are to be
surrendered for payment of the Redemption Price;
(f) that Notes called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price;
(g) the CUSIP number, if any, relating to such Notes; and
(h) in the case of a Note to be redeemed in part, the
principal amount of such Note to be redeemed and that after the Redemption Date
upon surrender of such Note, a new Note or Notes in the aggregate principal
amount equal to the unredeemed portion thereof will be issued.
Notice of redemption of Notes to be redeemed at the election
of the Company shall be given by the Company or, at its request, by the Trustee
in the name and at the expense of the Company.
SECTION 3.5. DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its
owning Paying Agent, segregate and hold in trust as provided in Section 4.3) an
amount of money in same day funds (or New York Clearing House funds if such
deposit is made prior to the applicable Redemption Date) sufficient to pay the
Redemption Price of, and accrued interest on, all the Notes or portions thereof
which are to be redeemed on that date.
SECTION 3.6. NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Notes
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Notes shall cease
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to bear interest. Upon surrender of any such Note for redemption in accordance
with said notice, such Note shall be paid by the Company at the Redemption Price
together with accrued interest to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Notes, registered as such on the
relevant Regular Record Dates according to the terms and the provisions of
Section 2.12.
If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal thereof (and premium, if any,
thereon) shall, until paid, bear interest from the Redemption Date at the rate
borne by such Note.
SECTION 3.7. NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part shall be
surrendered at the office or agency of the Company maintained for such purpose
pursuant to Section 4.2 (with, if the Company, the Registrar or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company, the Registrar or the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and a new Note in
principal amount equal to the unpurchased or unredeemed portion will be issued
in the name of the Holder thereof upon cancellation of the original Note. On and
after the purchase or redemption date, unless the Company defaults in payment of
the purchase or redemption price, interest shall cease to accrue on Notes or
portions thereof purchased or called for redemption.
SECTION 3.8. OPTIONAL REDEMPTION.
(a) Except as described in this Section 3.8, the Notes will
not be redeemable at the Company's option prior to January 1, 2003. On and after
January 1, 2003, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
written notice, at the Redemption Prices (expressed as a percentage of principal
amount) set forth below, plus accrued and unpaid interest, and Liquidated
Damages thereon, if any, to the applicable Redemption Date, if redeemed during
the twelve-month period beginning on January 1 of each of the years indicated
below:
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YEAR REDEMPTION
---- PRICE
-----
2003............................................. 104.313%
2004............................................. 102.875%
2005............................................. 101.438%
2006 and thereafter.............................. 100.000%
In addition, at any time on or prior to January 1, 2001, the
Company may (but will not have the obligation to) redeem for cash up to 35% of
the aggregate principal amount of Notes originally issued under this Indenture
on the Issue Date at a Redemption Price equal to 108.625% of the aggregate
principal amount thereof, plus accrued and unpaid interest, and Liquidated
Damages thereon, if any, to the Redemption Date, with the net cash proceeds of
an Equity Offering; provided that at least 65% of the aggregate principal amount
of Notes originally issued under this Indenture on the Issue Date remains
outstanding immediately after the occurrence of such redemption; provided,
further that such redemption occurs within 90 days of the date of closing of
such Equity Offering.
(b) Any redemption pursuant to this Section 3.8 shall be made
pursuant to the provisions of Sections 3.1 through 3.7 hereof.
SECTION 3.9. MANDATORY REDEMPTION.
Except as set forth under Sections 3.10, 4.9 and 4.10 hereof,
the Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.
SECTION 3.10. OFFER TO PURCHASE BY APPLICATION OF EXCESS
PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an offer to all Holders to purchase Notes
(an "Asset Sale Offer"), it shall follow the procedures specified below.
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The Asset Sale Offer will remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Asset Sale Offer
Period"). No later than five Business Days after the termination of the Asset
Sale Offer Period (the "Asset Sale Purchase Date"), the Company will purchase
the principal amount of Notes and Pari Passu Indebtedness required to be
purchased pursuant to Section 4.10 hereof (the "Asset Sale Offer Amount") or, if
less than the Asset Sale Offer Amount has been so validly tendered, all Notes
and Pari Passu Indebtedness validly tendered in response to the Asset Sale
Offer. Payment for any Notes so purchased will be made in the same manner as
interest payments are made on the Notes.
If the Asset Sale Purchase Date is on or after a Regular
Record Date and on or before the related Interest Payment Date, any accrued and
unpaid interest and Liquidated Damages will be paid to the Person in whose name
a Note is registered at the close of business on such Regular Record Date, and
no additional interest will be payable to Holders who tender Notes pursuant to
the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the Holders
of Notes, with a copy to the Trustee. The notice shall contain all instructions
and materials necessary to enable such holders or lenders, as the case may be,
to tender Notes pursuant to the Asset Sale Offer. The notice, which shall govern
the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to
this Section 3.10 and Section 4.10 hereof and the
length of time the Asset Sale Offer shall remain
open;
(b) the Asset Sale Offer Amount, the purchase price and
the Asset Sale Purchase Date;
(c) that any Note not tendered or accepted for payment
shall continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to
the Asset Sale Offer shall cease to accrue interest
after the Asset Sale Purchase Date;
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(e) that Holders of Notes electing to have a Note
purchased pursuant to any Asset Sale Offer shall be
required to surrender the Note with the form
entitled "Option of Holder to Elect Purchase" on
the reverse of the Note completed, or transfer by
book entry transfer, to the Company, a depositary,
if appointed by the Company, or a Paying Agent at
the address specified in the notice not later than
the third Business Day preceding the end of the
Asset Sale Offer Period;
(f) that Holders of Notes shall be entitled to withdraw
their election if the Company, the depositary or
the Paying Agent, as the case may be, receives, not
later than the Business Day preceding the end of
the Asset Sale Offer Period, a telegram, facsimile
transmission or letter setting forth the name of
such holder, the principal amount of the Note that
the Holder of Notes delivered for purchase and a
statement that such xxxxxx is withdrawing his
election to have such Note purchased;
(g) that, if the aggregate principal amount of Notes
surrendered by Holders of Notes or holders or
lenders of Pari Passu Indebtedness, as the case may
be, exceeds the Asset Sale Offer Amount, the
Company shall select the Notes and Pari Passu
Indebtedness, if any, to be purchased on a pro rata
basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes and
Pari Passu Indebtedness in denominations of $1,000,
or integral multiples thereof, shall be purchased);
and
(h) that Holders of Notes whose notes were purchased only
in part shall be issued new notes equal in principal
amount to the unpurchased portion of the notes
surrendered (or transferred by book-entry transfer).
On or before the Asset Sale Purchase Date, the Company will,
to the extent lawful, accept for payment, on a pro rata basis by principal
amount tendered to the extent necessary, the Asset Sale Offer Amount of Notes
and Pari Passu Indebtedness or portions
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thereof so validly tendered and not properly withdrawn pursuant to the Asset
Sale Offer, or if less than the Asset Sale Offer Amount has been validly
tendered and not properly withdrawn, all Notes and Pari Passu Indebtedness so
validly tendered and not properly withdrawn. The Company shall deliver to the
Trustee an Officers' Certificate stating that such Notes or portions thereof
were accepted for payment by the Company in accordance with the terms of this
section and, in addition, the Company shall deliver all certificates and notices
required, if any, by the agreements governing the Pari Passu Indebtedness. The
Company, the Depository or the Paying Agent, as the case may be, shall promptly
(but in any case not later than five days after the Asset Sale Purchase Date)
mail or deliver to each tendering Holder of Notes or holder or lender of Pari
Passu Indebtedness, as the case may be, an amount equal to the purchase price of
the Notes or Pari Passu Indebtedness so validly tendered and not properly
withdrawn by such Holder or lender, as the case may be, and accepted by the
Company for purchase, and the Company shall promptly issue a new Note, and the
Trustee, upon delivery of an Officers' Certificate from the Company will
authenticate and mail or deliver such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered. In addition,
the Company shall take any and all other actions required by the agreements
governing the Pari Passu Indebtedness. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Asset Sale
Purchase Date.
Other than as specifically provided in this Section 3.10, any
purchase pursuant to this Section 3.10 shall be made pursuant to the provisions
of Sections 3.1 through 3.7 hereof.
ARTICLE 4
COVENANTS
SECTION 4.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, Liquidated Damages, if any,
and interest shall be considered paid on the date due if the Paying Agent, if
other than the Company or a Subsidiary thereof, holds as of 10:00 a.m. Eastern
Time on the
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due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, Liquidated
Damages, if any, and interest then due.
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain, in The City of New York, an office
or agency where Notes may be presented or surrendered for payment, where Notes
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Notes and this Indenture
may be served. The Company will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes may
be presented or surrendered for any or all such purposes, and may from time to
time rescind such designation; provided, however, that no such designation or
recession shall in any manner relieve the Company of its obligation to maintain
an office or agency in The City of New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or recession
and any change in the location of any such office or agency.
SECTION 4.3. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent,
it will, on or before each due date of the principal of, premium, if any, or
interest on any of the Notes, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal, premium, if any,
or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for
the Notes, it will, on or before each due date of the principal
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of, premium, if any, or interest on any Notes, deposit with a Paying Agent a sum
in same day funds (or New York Clearing House funds if such deposit is made
prior to the date on which such deposit is required to be made) sufficient to
pay the principal, premium, if any, or interest so becoming due (or at the
option of the Company, payment of interest may be mailed by check to the Holders
of the Notes at their respective addresses set forth in the register of Holders
of Notes; provided that all payments with respect to Global Notes and Definitive
Notes, the holders of which have given wire transfer instructions to the Company
shall receive such payments of interest by wire transfer in same day funds) such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of such action or any failure so to
act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will:
(a) hold all sums held by it for the payment of the
principal of, premium, if any, or interest on Notes
in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company
(or any other obligor upon the Notes) in the making
of any payment of principal, premium, if any, or
interest;
(c) at any time during the continuance of any such
default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all
respects with the provisions of this Indenture
relating to the duties, rights and obligations of
such Paying Agent.
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The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any Note and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company on Company Request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense of the Company cause
notice to be promptly sent to each Holder that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such notification any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 4.4. REPORTS.
Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise
report on an annual and quarterly basis on forms provided for such annual and
quarterly reporting pursuant to rules and regulations promulgated by the
Commission, the Company shall, so long as any Notes are outstanding, furnish to
the Holders of Notes and the Trustee, within 15 days after it is or would have
been required to file such with the Commission, (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-K and 10-Q if the Company was required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information
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only, reports thereon by the certified independent accountants of the Company
and (ii) all current reports that would be required to be filed with the
Commission on Form 8-K if the Company was required to file such reports. In
addition, whether or not required by the rules and regulations of the
Commission, the Company will file copies of all such information and reports
with the Commission for public availability (unless the Commission will not
accept such a filing) and make such information available to securities analysts
and prospective investors upon request. In addition, the Company shall, until
the effectiveness of the registration statement relating to the Exchange Offer
pursuant to the Registration Rights Agreement, furnish to the Holders and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.5. STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.
(a) The Company will deliver to the Trustee, within 90 days
after the end of each fiscal year ending after the date hereof, a brief
certificate of its principal executive officer, principal financial officer or
principal accounting officer stating whether, to such officer's knowledge, the
Company is in compliance with all covenants and conditions to be complied with
by it under this Indenture (including with respect to any Restricted Payments
made during such year, the basis upon which the calculations required by Section
4.11 were computed, which calculations may be based on the Company's latest
financial statements), and further stating, as to each Officer signing such
certificate, that to the best of his or her knowledge each entity is not in
default in the performance or observance of any terms, provisions and conditions
of this Indenture (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action the Company is taking or proposes to take with respect
thereto) and that to the best of his or her knowledge no event has occurred and
remains in existence by reason of which payments on account of the principal of
or interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto. For purposes of this Section 4.5, such compliance
shall be determined without regard to any period of grace or requirement of
notice under this Indenture.
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(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
annual reports delivered pursuant to Section 4.4 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article Four or Article Five hereof or, if any such violation
has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, within five Business Days, upon
becoming aware of any Default or Event of Default, deliver to the Trustee an
Officer's Certificate specifying such Default or Event of Default.
SECTION 4.6. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all material taxes,
assessments and governmental charges levied or imposed upon it or any Subsidiary
or upon the income, profits or property of the Company or any of its
Subsidiaries and (b) all material lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a lien upon the property of the
Company or any of its Subsidiaries that could produce a material adverse effect
on the consolidated financial condition of the Company; provided, however, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings and in
respect of which appropriate reserves (in the good faith judgment of management
of the Company) are being maintained in accordance with GAAP.
SECTION 4.7. LIMITATION ON LIENS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer
to exist or become effective any Lien securing Indebtedness of any kind (other
than Permitted Liens) upon any of
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its property or assets, now owned or hereafter acquired, unless all payments
under the Notes are secured by such Lien prior to, or on an equal and ratable
basis with if such Indebtedness is pari passu with the Notes, the Indebtedness
so secured for so long as such Indebtedness is secured by such Xxxx.
SECTION 4.8. CORPORATE EXISTENCE.
Subject to Article Five, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and that of each Restricted Subsidiary of the Company and
the corporate rights (charter and statutory), corporate licenses and corporate
franchises of the Company and its Restricted Subsidiaries, except where a
failure to do so, singly or in the aggregate, is not likely to have a materially
adverse effect upon the business, assets, financial conditions or results of
operations of the Company and the Restricted Subsidiaries taken as a whole
determined on a consolidated basis in accordance with GAAP; provided that prior
to the occurrence and continuance of an Event of Default, the Company shall not
be required to preserve any such existence (except of the Company), right,
license or franchise if the Board of Directors of the Company, or of the
Restricted Subsidiary concerned, shall determine and deliver to the Trustee an
Officer's Certificate to the effect that the preservation thereof is no longer
desirable in the conduct of the business of the Company or such Restricted
Subsidiary and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 4.9. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the date
of purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase the Notes pursuant to the procedures required by this Indenture
and described in such notice. The Company shall comply with the
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requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Indenture, the Company will
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations described in this Indenture by virtue
thereof.
The Change of Control Offer shall remain open for a period of
20 Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Change of Control Offer
Period"). No later than five Business Days after the termination of the Offer
Period (the "Change of Control Purchase Date"), the Company shall purchase all
Notes validly tendered and not properly withdrawn pursuant to the Change of
Control Offer. Payment for any Notes so purchased will be made in the same
manner as interest payments are made on the Notes.
If the Change of Control Purchase Date is on or after Regular
Record Date and on or before the related Interest Payment Date, any accrued and
unpaid interest and Liquidated Damages, if any, will be paid to the Person in
whose name a Note is registered at the close of business on such Regular Record
Date, and no additional interest will be payable to Holders who tender Notes
pursuant to the Change of Control Offer.
Upon the commencement of a Change of Control Offer, the
Company shall send, by first class mail, a notice to each of the Holders, with a
copy of each such notice to the Trustee. The notice shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Change of Control Offer. The Change of Control Offer shall be
made to all Holders. The notice, which shall govern the terms of the Change of
Control Offer, shall state:
(a) that the Change of Control Offer is being made
pursuant to this covenant and the length of time the Change of Control
Offer shall remain open;
(b) the purchase price and the Change of Control
Purchase Date;
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(c) that any Note which is not validly tendered or is
otherwise not accepted for payment shall continue to accrete or accrue
interest;
(d) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrete or accrue interest after the
Change of Control Purchase Date;
(e) that Holders electing to have a Note purchased
pursuant to any Change of Control Offer shall be required to surrender
the Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Note completed, or transfer by book-entry
transfer, to the Company, a depositary, if appointed by the Company, or
a Paying Agent at the address specified in the notice at least three
days before the Change of Control Purchase Date;
(f) that Holders shall be entitled to withdraw their
election if the Company, the depositary or the Paying Agent, as the
case may be, receives, not later than the expiration of the Change of
Control Offer Period, a telegram, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Note
the Holder delivered for purchase and a statement that such Xxxxxx is
withdrawing his election to have such Note purchased;
(g) that Holders whose Notes are being purchased in
part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple
thereof;
(h) a description of the transaction resulting in
such Change of Control Offer; and
(i) any additional instructions a Holder must follow
in order to have its Notes repurchased in accordance with this Section
4.9.
On the Change of Control Purchase Date, the Company shall, to
the extent lawful, (1) accept for payment all Notes or portions thereof validly
tendered and not properly withdrawn pursuant to the Change of Control Offer, (2)
deposit with the
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Paying Agent an amount equal to the Change of Control Payment in respect of all
Notes or portions thereof so validly tendered and not properly withdrawn and (3)
deliver or cause to be delivered to the Trustee the Notes so accepted together
with an Officers' Certificate stating the aggregate principal amount of Notes or
portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to each Holder of the Notes so validly tendered and not properly withdrawn
the Change of Control Payment for such Notes and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such new Note shall be in a principal
amount of $1,000 or an integral multiple thereof. Prior to complying with the
provisions of this covenant, but in any event within 30 days following a Change
of Control, the Company shall either repay all outstanding Senior Debt or obtain
the requisite consents, if any, under all agreements governing outstanding
Senior Debt to permit the repurchase of the Notes required by this covenant. The
Company shall publicly announce the results of the Change of Control Offer on
the Change of Control Purchase Date.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company (or
the Restricted Subsidiary, as the case may be) receives consideration at the
time of such Asset Sale at least equal to the fair market value of the assets or
Equity Interests sold or otherwise disposed of (evidenced by a resolution of the
Board of Directors of such entity set forth in an Officers' Certificate
delivered to the Trustee) and (ii) at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary from such Asset Sale, plus
all other Asset Sales since the date hereof, on a cumulative basis, is in the
form of cash, Cash Equivalents, properties and capital assets to be used by the
Company or any Restricted Subsidiary in the Oil and Gas Business or oil and gas
properties owned or held by another Person which are to be used in the Oil and
Gas Business of the Company or its Restricted Subsidiaries, or any combination
thereof (collectively the "Cash Consideration" ); provided that the amount of
(x) any liabilities (as shown on the Company's or such Restricted Subsidiary's
most recent balance sheet) of the Company or any Restricted Subsidiary (other
than contingent liabilities and
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liabilities that are by their terms subordinated to the Notes or any Subsidiary
Guarantee) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Restricted
Subsidiary from further liability and (y) any non Cash Consideration received by
the Company or any such Restricted Subsidiary from such transferee that are
converted into cash by the Company or such Restricted Subsidiary within 90 days
after such Asset Sale, shall be deemed to be cash for purposes of this provision
to the extent of the cash received.
Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company (or the Restricted Subsidiary, as applicable) may apply,
or enter into binding contracts (subject only to obtaining required governmental
approvals) irrevocably committing the Company or such Restricted Subsidiary to
apply, such Net Proceeds to an investment in another business, the making of a
capital expenditure or the acquisition of other tangible assets, in each case in
the Oil and Gas Business, or the Company (or the Restricted Subsidiary, as
applicable) may apply such Net Proceeds to the permanent reduction of Senior
Debt. Any Net Proceeds from Asset Sales that are not applied or invested or
committed to be applied or invested, as provided in the preceding sentence of
this paragraph will be deemed to constitute "Excess Proceeds." On the 361st day
after an Asset Sale, if the aggregate amount of Excess Proceeds exceeds $10.0
million, the Company will be required to make an offer to all Holders of Notes
and, to the extent required by the terms thereof, to all holders or lenders of
Pari Passu Indebtedness (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes and any such Pari Passu Indebtedness to which the
asset sale offer applies that may be purchased out of the Excess Proceeds, at an
offer price in cash in an amount equal to 100% of the principal amount thereof
plus accrued and unpaid interest and, with respect to the Notes or similar
securities, Liquidated Damages or comparable amounts in the case of similar
securities, if any, thereon to the date of purchase, in accordance with the
procedures set forth in Section 3.10 hereof or the agreements governing the Pari
Passu Indebtedness, as applicable. To the extent that the aggregate amount of
Notes and Pari Passu Indebtedness so validly tendered and not properly withdrawn
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
may use any remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount of Notes surrendered by Holders thereof and other
Pari Passu Indebtedness
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surrendered by holders or lenders thereof, collectively, exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes and Pari Passu Indebtedness
to be purchased on a pro rata basis on the basis of the aggregate principal
amount of tendered Notes and Pari Passu Indebtedness. Upon completion of such
Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws or regulations are applicable in connection with the
repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Indenture, the Company will comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations described
in this Indenture by virtue thereof.
SECTION 4.11. LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Company)
(other than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company); (ii) purchase, redeem or otherwise acquire
or retire for value any Equity Interests of the Company or any Restricted
Subsidiary of the Company; (iii) prepay, purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness that is subordinated to the Notes,
except a scheduled repayment of principal or a payment of principal at stated
maturity; or (iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively referred
to as "Restricted Payments"), unless, at the time of and after giving effect to
such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the
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applicable four-quarter period, have been permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in the first paragraph of Section 4.12 hereof; and
(c) such Restricted Payment, together with the aggregate of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date hereof, does not exceed the sum of, without
duplication, (i) 50% of the Consolidated Net Income of the Company for
the period (taken as one accounting period) from the beginning of the
first fiscal quarter commencing after the date hereof to the end of the
Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit or loss, less 100% of such deficit or loss), plus (ii) to the
extent not included in the amount described in clause (i) above, 100%
of the aggregate net cash proceeds and the fair market value of
marketable securities (as determined in good faith by the Company)
received after the date hereof by the Company from the issue or sale
of, or from additional capital contributions in respect of, Equity
Interests of the Company (but excluding cash proceeds and marketable
securities received from the sale of Equity Interests to members of
management or directors of the Company and its Restricted Subsidiaries
after the Issue Date to the extent such amounts have been applied to
make Restricted Payments in accordance with clause (vi) of the next
succeeding paragraph) or of debt securities of the Company that have
been converted into or exchanged for Equity Interests of the Company
(other than Equity Interests (or debt securities) sold to a Subsidiary
of the Company and other than Disqualified Stock or debt securities
that have been converted into or exchanged for Disqualified Stock),
plus (iii) to the extent that any Restricted Investment that was made
after the date hereof is sold to an unaffiliated purchaser for cash or
marketable securities or otherwise liquidated or repaid for cash or
marketable securities, the lesser of the cash proceeds and/or the fair
market value of such marketable securities (as determined in good faith
by the Company), as the case may be, and the amount of the Restricted
Investment, which amount was included in the calculation of the amount
of Restricted Payments, plus (iv) the amount equal to the net reduction
in Investments in Unrestricted Subsidiaries resulting from (A)
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payments of dividends or interest or other transfers of assets to the
Company or any Restricted Subsidiary from Unrestricted Subsidiaries,
(B) the redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries or (C) the receipt of proceeds by the Company or any
Restricted Subsidiary from the sale or other disposition of any portion
of any Investment in an Unrestricted Subsidiary not to exceed the
amount of Investments previously made by the Company or any Restricted
Subsidiary in such Unrestricted Subsidiary, which amount was included
in the calculation of the amount of Restricted Payments under this
clause (c) and not otherwise included in the calculation of
Consolidated Net Income, plus (v) $5.0 million.
The foregoing provisions will not prohibit (i) the payment of
any dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the provisions of this
Indenture; (ii) the making of any Restricted Investment in exchange for, or out
of the proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of, or from substantially concurrent additional
capital contributions in respect of, Equity Interests of the Company (other than
Disqualified Stock); provided that the amount of any such cash proceeds that are
utilized for any such Restricted Investment shall be excluded from clause
(c)(ii) of the preceding paragraph; (iii) the redemption, repurchase, retirement
or other acquisition of any Equity Interests of the Company in exchange for, or
out of the proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of, or from substantially concurrent additional
capital contributions (other than from a Subsidiary of the Company) in respect
of, other Equity Interests of the Company (other than any Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement or other acquisition shall be excluded
from clause (c)(ii) of the preceding paragraph; (iv) the defeasance, redemption
or repurchase of subordinated Indebtedness with the net cash proceeds from (X)
an incurrence of Permitted Refinancing Indebtedness or (Y) the substantially
concurrent sale (other than to a Subsidiary of the Company) of, or from
substantially concurrent additional capital contributions (other than from a
Subsidiary of the Company) in respect of, Equity Interests of the Company (other
than Disqualified Stock); provided that the amount of any such net cash proceeds
that are utilized for any such defeasance, redemption or
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repurchase shall be excluded from clause (c)(ii) of the preceding paragraph; (v)
any dividend or other distribution made by any Wholly Owned Subsidiary of the
Company to another Wholly Owned Subsidiary of the Company or to the Company; and
(vi) the repurchase, retirement or other acquisition or retirement for value of
common Equity Interests of the Company held by any future, present or former
employee or director of the Company or any of the Company's Restricted
Subsidiaries pursuant to any management equity plan or stock option plan or any
other management or employee benefit plan or agreement in connection with the
termination of such person's employment for any reason (including by reason of
death or disability); provided, however, that the aggregate Restricted Payments
made under this clause (vi) do not exceed in any calendar year $2.5 million
(with unused amounts in any calendar year being carried over to succeeding
calendar years subject to a maximum (without giving effect to the following
proviso) of $7.5 million in any calendar year); provided further that such
amount in any calendar year may be increased by an amount not to exceed (A) the
cash proceeds received by the Company from the sale of Equity Interests of the
Company to members of management or directors of the Company and its Restricted
Subsidiaries that occurs after the Issue Date (to the extent the cash proceeds
from the sale of such Equity Interests have not otherwise been applied to the
payment of Restricted Payments by virtue of the preceding paragraph (c)), plus
(B) the cash proceeds of key man life insurance policies received by the Company
and its Restricted Subsidiaries after the Issue Date, less (C) the amount of any
Restricted Payments made pursuant to clauses (A) and (B) of this subparagraph
(vi); provided however that in the case of any transaction described in clauses
(ii) through (iv) and clause (vi) no Default or Event of Default will have
occurred and be continuing immediately after such transaction. In determining
the aggregate amount of Restricted Payments made after the date hereof, 100% of
the amounts expended pursuant to the foregoing clauses (i) and (vi) shall be
included in such calculation and none of the amounts expended pursuant to the
foregoing clauses (ii), (iii), (iv) and (v) shall be included in such
calculation.
As of the date hereof, all of the Company's Subsidiaries were
Restricted Subsidiaries. The Board of Directors may designate any Subsidiary to
be an Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
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the Subsidiary so designated will be deemed to be Restricted Payments at the
time of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of this covenant. Such designation will only
be permitted if such Restricted Payment would be permitted at such time and if
such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the
fair market value (evidenced by a resolution of the Board of Directors set forth
in an Officers' Certificate delivered to the Trustee) on the date of the
Restricted Payment of the asset(s) proposed to be transferred by the Company or
the applicable Restricted Subsidiary, as the case may be, pursuant to the
Restricted Payment. Not later than the date of making any Restricted Payment,
the Company shall deliver to the Trustee an Officers' Certificate stating that
such Restricted Payment is permitted and setting forth the basis upon which the
calculation required by this covenant were computed, which calculations may be
based upon the Company's latest available financial statements.
SECTION 4.12. LIMITATION ON INCURRENCE OF INDEBTEDNESS AND
ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Indebtedness) and that the Company will not
issue any shares of Disqualified Stock and will not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock; provided, however, that the
Company may incur Indebtedness (including Acquired Indebtedness) or issue shares
of Disqualified Stock if: (i) the Fixed Charge Coverage Ratio for the Company's
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock is issued would have been at
least 2.5 to 1.0, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the Disqualified Stock had been issued, as the case may
be, at the beginning of such four-quarter period; and (ii) no Default or Event
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of Default will have occurred and be continuing or would occur as a consequence
thereof.
The foregoing provisions will not apply to:
(i) the incurrence by the Company of Indebtedness under the
Credit Agreement, so long as the aggregate principal amount of all
Indebtedness outstanding under the Credit Agreement does not, at any
one time, exceed the greater of (i) $150 million (less any amounts
outstanding under the Credit Agreement on the Issue Date after giving
effect to the repayment of Indebtedness under the Credit Agreement from
the proceeds of the offering of the Notes) (or, if there is any
permanent reduction in the aggregate principal amount permitted to be
borrowed under the Credit Agreement, such lesser aggregate principal
amount) and (ii) 30% of Adjusted Consolidated Net Tangible Assets
determined immediately after the incurrence of such Indebtedness
(including the application of the proceeds therefrom);
(ii) the incurrence by the Company of Indebtedness represented
by the Notes or by the Restricted Subsidiaries of Subsidiary
Guarantees;
(iii) the guarantee by any Subsidiary Guarantor of any
Indebtedness that is permitted by this Indenture to be incurred by the
Company at the time such Indebtedness was incurred;
(iv) the incurrence by the Company or any Restricted
Subsidiary of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund, Indebtedness of such entity that was
permitted by this Indenture to be incurred (including Indebtedness
previously incurred pursuant to this clause (iv), but excluding
Indebtedness under clauses (i), (iii), (v), (vi), and (ix));
(v) the incurrence by the Company or any Restricted Subsidiary
of intercompany Indebtedness between or among the Company and any of
its Restricted Subsidiaries or between or among any Restricted
Subsidiary; provided, however, that (i) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness
being held by a Person other
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than a Restricted Subsidiary and (ii) any sale or other transfer of any
such Indebtedness to a Person that is not either the Company or a
Restricted Subsidiary will be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company or such Restricted
Subsidiary, as the case may be; provided, further, that if the Company
is the obligor on such Indebtedness, such Indebtedness is expressly
subordinate to the payment in full of all Obligations with respect to
the Notes;
(vi) the incurrence, assumption or creation of Hedging
Obligations of the Company or a Restricted Subsidiary pursuant to
interest rate protection obligations, but only to the extent that the
stated aggregate notional amounts of such obligations do not exceed
105% of the aggregate principal amount of the Indebtedness covered by
such interest rate protection obligations; the incurrence, assumption
or creation of Hedging Obligations under currency exchange contracts
entered into in the ordinary course of business for the purpose of
limiting risks that arise in the ordinary course of business of the
Company and its Restricted Subsidiaries; and the incurrence, assumption
or creation of hedging arrangements that the Company or a Restricted
Subsidiary enters into in the ordinary course of business in the Oil
and Gas Business for the purpose of protecting its production against
fluctuations in oil or natural gas prices;
(vii) Indebtedness or Disqualified Stock of Persons that are
acquired by the Company or any of its Restricted Subsidiaries or merged
into a Restricted Subsidiary in accordance with the terms of this
Indenture; provided that such Indebtedness or Disqualified Stock is not
incurred in contemplation of such acquisition or merger; and provided
further that after giving effect to such acquisition, the Company would
be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of this covenant;
(viii) all Indebtedness of the Company and its Restricted
Subsidiaries in existence on the date of this Indenture; and
(ix) the incurrence by the Company and its Restricted
Subsidiaries of Indebtedness in an aggregate principal amount
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of up to $40 million (which shall be in addition to amounts which may
be incurred pursuant to clauses (i) through (viii) above).
In the event that Indebtedness falls within more than one
category of permitted Indebtedness under this Indenture, the Company will
determine the applicable category and such Indebtedness will only be counted
once. If Indebtedness is issued at less than the principal amount thereof, the
amount of such Indebtedness for purposes of the above limitations shall equal
the amount of the liability as determined in accordance with GAAP.
The Company shall not permit any Unrestricted Subsidiary to
incur any Indebtedness other than Non-Recourse Debt; provided, however, if any
such Indebtedness ceases to be Non-Recourse Debt, such event shall be deemed to
constitute an incurrence of Indebtedness by the Company or a Restricted
Subsidiary.
SECTION 4.13. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or make any contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is in the ordinary course
of business, (ii) the terms of such Affiliate Transaction are fair and
reasonable to the Company or such Restricted Subsidiary, as the case may be, and
are at least as favorable as the terms which could be obtained by the Company or
such Restricted Subsidiary, as the case may be, in a comparable transaction made
on an arm's-length basis between unaffiliated parties and (iii) the Company
delivers to the Trustee (a) with respect to any Affiliate Transaction entered
into after the date hereof involving aggregate consideration in excess of $2.5
million, a resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with clauses (i)
and (ii) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors and (b) with
respect to any Affiliate Transaction involving aggregate consideration in excess
of $10.0 million, an opinion as to the fairness to the Company or such
Restricted Subsidiary of such Affiliate Transaction from a
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financial point of view issued by an investment banking firm of national
standing; provided that the following will not be deemed to be Affiliate
Transactions: (a) reasonable fees and compensation paid to, and indemnity
provided on behalf of, officers and directors of the Company or any Restricted
Subsidiary as determined in good faith by the appropriate Board of Directors or
senior management; (b) transactions with customers, clients, suppliers, joint
venture partners or purchasers or sellers of goods or services, in each case in
the ordinary course of business (including, without limitation, pursuant to
joint venture agreements) and otherwise in compliance with the terms of this
Indenture and which comply with the terms of clause (ii) above; (c) any
employment agreement entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business and consistent with the past
practice of the Company or such Restricted Subsidiary (including, without
limitation, any such employment agreements entered into prior to the date of
this Indenture); (d) transactions between or among the Company and/or its
Restricted Subsidiaries; (e) Restricted Payments and Permitted Investments that
are permitted by Section 4.11 and the definition of Permitted Investment; and
(f) any contracts, agreements or understandings existing as of the date hereof
and any amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto or any replacement agreement thereof so long
as any such amendment or replacement agreement is not more disadvantageous to
the holders of the Notes in any material respect than the original agreement as
in effect on the date hereof).
SECTION 4.14. DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (i) (a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (b) pay any indebtedness owed to the Company or any
of its Restricted Subsidiaries, (ii) make loans or advances to the Company or
any of its Restricted Subsidiaries or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by
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reason of (a) Existing Indebtedness as in effect on the date hereof, (b) the
Credit Agreement as in effect as of the date hereof, and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are no more restrictive with respect to such
dividend and other payment restrictions than those contained in the Credit
Agreement as in effect on the date hereof, (c) this Indenture and the Notes, (d)
any instrument governing Acquired Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Acquired Indebtedness
was incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired, provided that the Consolidated Cashflow of such Person is
not taken into account in determining whether such acquisition was permitted by
the terms of this Indenture, (e) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (iii) above on the property so acquired, (f) by
reason of customary non-assignment provisions in leases and licenses entered
into in the ordinary course of business and consistent with past practices, (g)
agreements relating to the financing of the acquisition of real or tangible
personal property acquired after the date hereof, provided, that such
encumbrance or restriction relates only to the property which is acquired and in
the case of any encumbrance or restriction that constitutes a Lien, such Lien
constitutes a Purchase Money Lien, (h) applicable law or (i) customary
restrictions contained in asset sale agreements limiting the transfer of such
assets pending the closing of such sale.
SECTION 4.15. LIMITATIONS ON GUARANTEES OF INDEBTEDNESS BY
RESTRICTED SUBSIDIARIES.
(a) The Company shall not permit any Restricted Subsidiary to
guarantee the payment of any Indebtedness of the Company unless (i) such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a Subsidiary Guarantee of such
Restricted Subsidiary except that with respect to a guarantee of Indebtedness of
the Company (A) if the Notes are subordinated in right of payment to
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such Indebtedness, the Subsidiary Guarantee under the supplemental indenture
shall be subordinated to such Restricted Subsidiary's guarantee with respect to
such Indebtedness substantially to the same extent as the Notes are subordinated
to such Indebtedness under this Indenture and (B) if such Indebtedness is by its
express terms subordinated in right of payment to the Notes, any such guarantee
of such Restricted Subsidiary with respect to such Indebtedness shall be
subordinated in right of payment to such Restricted Subsidiary's Subsidiary
Guarantee with respect to the Notes substantially to the same extent as such
Indebtedness is subordinated to the Notes; (ii) such Restricted Subsidiary
waives and will not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any other
rights against the Company or any other Restricted Subsidiary as a result of any
payment by such Restricted Subsidiary under its Subsidiary Guarantee of the
Notes; and (iii) such Restricted Subsidiary shall deliver to the Trustee an
opinion of counsel to the effect that (A) such Subsidiary Guarantee has been
duly executed and authorized and (B) such Subsidiary Guarantee constitutes a
valid, binding and enforceable obligation of such Restricted Subsidiary, except
insofar as enforcement thereof may be limited by bankruptcy, insolvency or
similar laws (including, without limitation, all laws relating to fraudulent
transfers) and except insofar as enforcement thereof is subject to general
principles of equity; provided that this paragraph (a) shall not be applicable
to any guarantee of any Restricted Subsidiary (x) that (A) existed at the time
such Person became a Restricted Subsidiary of the Company and (B) was not
incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary of the Company or (y) that guarantees the payment of
Obligations of the Company under the Credit Agreement or any other Senior Debt
of the Company and any refunding, refinancing or replacement thereof, in whole
or in part, provided that such refunding, refinancing or replacement thereof
constitutes Senior Debt of the Company.
(b) Notwithstanding the foregoing and the other provisions of
this Indenture, any Subsidiary Guarantee shall provide by its terms that it
shall be automatically and unconditionally released and discharged upon (i) any
sale, exchange or transfer, to any Person not an Affiliate of the Company, of
all of the Company's Capital Stock in, or all or substantially all the assets
of, such Restricted Subsidiary whether by way of merger, consolidation or
otherwise (which sale, exchange or transfer is not prohibited by this
Indenture); provided that the Net Proceeds of
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such sale or other disposition are applied in accordance with Section 4.10 or
(ii) the release or discharge of the guarantee which resulted in the creation of
such Subsidiary Guarantee, except a discharge or release by or as a result of
payment under such guarantee.
SECTION 4.16. LIMITATION ON OTHER SENIOR SUBORDINATED
INDEBTEDNESS.
The Company shall not incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt and senior in any respect in right of
payment to the Notes. In addition, the Company shall not permit the Subsidiary
Guarantors, if any, directly or indirectly, to incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to Senior Debt and senior in any respect in right of
payment to the Subsidiary Guarantees, if any; provided, however, that the
foregoing limitations will not apply to distinctions between categories of
Indebtedness that exist by reason of any Liens arising or created in accordance
with the provisions of this Indenture in respect of some but not all such
Indebtedness.
SECTION 4.17. LIMITATION AS TO UNRESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any Unrestricted
Subsidiary to create, assume, incur, guarantee or otherwise become liable in
respect of any Indebtedness except Non-Recourse Debt. The Company shall not, and
shall not permit its Restricted Subsidiaries to designate, create or purchase
any Unrestricted Subsidiary, unless the Board of Directors of the Company shall
have made a determination (as set forth in the resolution approving such
designation, creation or purchase) that the designation, creation and operation
of the Unrestricted Subsidiary is not reasonably expected to materially and
adversely affect the financial condition, business, or operations of the Company
and its Restricted Subsidiaries taken together as a whole (which resolution
shall be conclusive evidence of compliance with this provision).
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SECTION 4.18. LINE OF BUSINESS.
The Company shall not, and shall not permit any Subsidiary to,
engage in any line of business other than the Oil and Gas Business, except to
the extent as would not be material to the Company and its Subsidiaries taken as
a whole.
SECTION 4.19. EFFECTIVENESS OF COVENANTS.
The covenants described in Sections 4.7, 4.11, 4.12, 4.13,
4.14, 4.16 and 4.17 will no longer be in effect upon the Company reaching
Investment Grade Status.
ARTICLE 5
SUCCESSORS
SECTION 5.1. MERGER, CONSOLIDATION, OR SALE OF ALL OR
SUBSTANTIALLY ALL ASSETS.
(a) The Company shall not, in a single transaction or series
of related transactions, consolidate or merge with or into (whether or not the
Company is the surviving corporation), or directly and/or indirectly through its
Restricted Subsidiaries sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets determined on a
consolidated basis for the Company and its Restricted Subsidiaries taken as a
whole in one or more related transactions, to another Person unless (i) the
Company is the surviving corporation or the Person formed by or surviving any
such consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition will have been
made, is a corporation organized or existing under the laws of one of the states
of the United States or the District of Columbia; (ii) the Person formed by or
surviving any such consolidation or merger (if other than the Company) or the
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition will have been made assumes all the obligations of the Company,
under the Notes and this Indenture pursuant to a supplemental indenture in a
form reasonably satisfactory to the Trustee; (iii) immediately after such
transaction no Default or Event of Default exists; (iv) the Company or the
entity or Person formed by or surviving any such consolidation or merger (if
other than the Company), or to which such sale, assignment, transfer, lease,
conveyance or other disposition will have been made will, at the time of such
transaction and after giving pro forma effect thereto
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as if such transaction had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.12; and (v) the Company delivers to the Trustee an
Officers' Certificate and an Opinion of Counsel addressed to the Trustee with
respect to the foregoing matters. Each Subsidiary Guarantor, if any, unless it
is the other party to the transactions described above, shall have confirmed by
supplemental indenture that its Subsidiary Guarantee shall apply to such
Person's obligations under this Indenture and the Notes.
(b) Subject to the provisions of the succeeding sentence
relating to sales of Subsidiary Guarantors, the Company shall not permit a
Subsidiary Guarantor to consolidate with, or merge with or into (whether or not
such Subsidiary Guarantor is the surviving Person), another Person other than
the Company or another Subsidiary Guarantor whether or not affiliated with such
Subsidiary Guarantor, unless (i) subject to the provisions of the following
sentence, the Person formed by or surviving any such consolidation or merger (if
other than such Subsidiary Guarantor) assumes all the obligations of such
Subsidiary Guarantor pursuant to a supplemental indenture in form and substance
reasonably satisfactory to the Trustee in respect of the Notes, this Indenture
and the Subsidiary Guarantees; (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists; and (iii) the Company
delivers to the Trustee an Officers' Certificate and an Opinion of Counsel
addressed to the Trustee with respect to the foregoing matters. In the event of
a sale or other disposition of all or substantially all of the assets of a
Subsidiary Guarantor to a third party (in each case, other than to an Affiliate
of the Company), by way of merger, consolidation or otherwise, or a sale or
other disposition of all of the Capital Stock of a Subsidiary Guarantor, then
such Subsidiary Guarantor (in the event of a sale or other disposition, by way
of such a merger, consolidation or otherwise, of all of the Capital Stock of
such Subsidiary Guarantor) or the Person acquiring the property (in the event of
a sale or other disposition of all or substantially all of the assets of such
Subsidiary Guarantor) will be released from and relieved of any obligations
under its Subsidiary Guarantee; provided that the Net Proceeds of such sale or
other disposition are applied in accordance with Section 4.10. Further,
notwithstanding the foregoing, the merger of the Company with an Affiliate
incorporated
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solely for the purpose of reincorporating the Company in another jurisdiction
shall be permitted.
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any sale, assignment,
transfer, lease or conveyance or other disposition of all or substantially all
of the assets of the Company in accordance with Section 5.1, the Successor
Company will succeed to, and be substituted for, the Company under this
Indenture and the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT AND NOTICE THEREOF.
Each of the following constitutes an "Event of Default":
(a) default in payment when due of the principal of or
premium, if any, on the Notes;
(b) default for 30 days in the payment when due of
interest on, or Liquidated Damages with respect to,
the Notes;
(c) failure by the Company to comply with the provisions
described in Sections 4.9, 4.10, 4.11, or 5.1 of this
Indenture;
(d) failure by the Company or a Subsidiary Guarantor, if
any, for 60 days after notice from the Trustee or the
Holders of at least 25% in principal amount of the
then outstanding Notes to comply with any of its
other agreements in this Indenture, the Notes or the
Subsidiary Guarantees, if any;
(e) default under any mortgage, indenture or instrument
under which there may be issued or by which there
may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted
Subsidiaries), other than Indebtedness owed to the
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Company or a Wholly Owned Subsidiary, whether such
Indebtedness or guarantee now exists, or is created
after the date hereof, which default (a) is caused
by a failure to pay principal of or premium, if
any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such
Indebtedness on the date of such default unless
being contested in good faith by appropriate
proceedings (a "Payment Default") or (b) results in
the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal
amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness
under which there has been a Payment Default or the
maturity of which has been so accelerated,
aggregates $10.0 million or more;
(f) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in
excess of $10 million, which judgments are not paid,
discharged or stayed for a period of 60 days;
(g) the Company or any of its Significant Subsidiaries or
group of Restricted Subsidiaries that, together taken
(as of the latest audited consolidated financial
statements for the Company and its Subsidiaries),
would constitute a Significant Subsidiary (such group
herein referred to as a "Significant Group of
Subsidiaries"):
(i) commences a voluntary case,
(ii) consents to the entry of an order for
relief against it in an involuntary case
in which it is the debtor,
(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
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(v) admits in writing its inability
generally to pay its debts as the same
become due;
(h) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company, any
of its Significant Subsidiaries, or a
Significant Group of Subsidiaries in an
involuntary case in which it is the
debtor,
(ii) appoints a Custodian of the Company, any
of its Significant Subsidiaries, or a
Significant Group of Subsidiaries or for
all or substantially all of the property
of the Company, a Significant Subsidiary
or a Significant Group of Subsidiaries;
or
(iii) orders the liquidation of the Company,
any of its Significant Subsidiaries, or
a Significant Group of Subsidiaries;
and the order or decree contemplated in clauses (i), (ii) or
(iii) of this clause (h), remains unstayed and in effect for
60 consecutive days; or
(i) except as permitted herein, any Subsidiary Guarantee
shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any
reason to be in full force and effect or a
Subsidiary, or any Person acting on behalf of such
Subsidiary, shall deny or disaffirm its obligations
under its Subsidiary Guarantee.
SECTION 6.2. ACCELERATION OF MATURITY; RESCISSION.
If an Event of Default (other than of a type specified in
clauses (g) or (h) of Section 6.1) occurs and is continuing hereunder, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare the principal, premium, if any, interest and any
other monetary obligations (including Liquidated Damages) on all the then
outstanding Notes to
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be due and payable immediately by notice in writing to the Company (and the
Trustee, if given by the Holders);
Notwithstanding the foregoing, in the case of an Event of
Default arising under clauses (g) or (h) of Section 6.1, all outstanding Notes
will become due and payable without further action or notice. The Holders of a
majority in principal amount of the Notes then outstanding by written notice to
the Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default (except nonpayment of principal or interest or Liquidated Damages that
has become due solely because of the acceleration) have been cured or waived.
SECTION 6.3. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding 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 of a Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.4. WAIVER OF PAST DEFAULTS.
Holders of a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment interest on, or the principal of, premium, if any, or Liquidated Damages
on the Notes. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
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SECTION 6.5. CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the
then outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability. The Trustee may take any other action
which it deems proper which is not inconsistent with any such direction.
SECTION 6.6. LIMITATION ON SUITS.
No Holder of a Note will have any right to institute any
proceeding with respect to this Indenture or for any remedy hereunder, unless
(i) such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Notes, (ii) the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding shall have
made a written request to the Trustee to institute such proceeding and, if
requested by the Trustee, provided reasonable indemnity to the Trustee, with
respect to such proceeding and (iii) the Trustee shall not have received from
the Holders of a majority in aggregate principal amount of the Notes then
outstanding a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days.
SECTION 6.7. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal, premium, if any,
and interest on any Note, on or after the respective due dates expressed in any
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 6.8. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(a) or (b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against
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the Company for the whole amount of principal of, premium, if any, and interest
and Liquidated Damages remaining unpaid on the Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders of the Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, as administrative expenses associated with any such
proceeding and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.7 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
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SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article
Six, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for
amounts due under Section 7.7 hereof, including payment
of all compensation, expense and liabilities incurred,
and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to holders of Senior Debt of the Company or
Senior Debt of the Subsidiary Guarantors, if any, to the
extent required by Article 10 hereof or any Subsidiary
Guarantee;
Third: to Holders of Notes for amounts due and unpaid on
the Notes for principal, premium, if any, and interest,
ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for
principal, premium, if any, and interest, respectively;
Fourth: without duplication, to the Holders for any
other Obligations owing to the Holders under this
Indenture and the Notes; and
Fifth: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section does not apply to a suit by the Trustee, a suit
by a Holder of a Note
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pursuant to Section 6.7 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
SECTION 6.12. WAIVER OF STAY, EXTENSION OF USURY LAWS.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and 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.
ARTICLE 7
TRUSTEE
SECTION 7.1. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent 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 duties of the Trustee shall be determined
solely by the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(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,
provided, that the Trustee
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shall examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section 7.1;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture unless the Holders shall have offered to the Trustee security and
indemnity satisfactory to it against any loss, liability, claim, damage or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.2. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The
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Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel of its selection and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
SECTION 7.3. 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
with the same rights it would have if it were not Trustee. However, in the event
that the Trustee acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the Commission for permission to continue as
trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.4. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the
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proceeds from the Notes or any money paid to the Company or upon the direction
of the Company under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.
SECTION 7.5. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it occurs. Except
in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Note, the Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each February 1 beginning with the
February 1 following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the Commission
and each stock exchange, if any, on which the Notes are listed in accordance
with TIA ss. 313(d). The Company shall promptly notify the Trustee when the
Notes are listed on any stock exchange or delisted therefrom.
SECTION 7.7. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee, from time to time as may
be agreed upon between them, reasonable compensation for its
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acceptance of this Indenture and services hereunder. 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 promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Company shall indemnify each of the Trustee and any
predecessor Trustee against any and all losses, liabilities or expenses
(including taxes other than taxes based on the income of the Trustee) incurred
by it arising out of or in connection with the acceptance or administration of
its duties under this Indenture, including the costs and expenses of enforcing
this Indenture against the Company (including this Section 7.7) and defending
itself against any claim (whether asserted by the Company or any Holder or any
other person) or liability in connection with the exercise or performance of any
of its powers or duties hereunder, except to the extent any such loss,
liability, claim, damage or expense may be attributable to its negligence or bad
faith. The Trustee shall notify the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.7 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(g) or (h) hereof occurs, the expenses
and the compensation for the services
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(including the fees and expenses of its agents and counsel) are intended to
constitute expenses of administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss.
313(b)(2) to the extent applicable.
SECTION 7.8. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.8.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of Notes of a majority in principal amount of the then outstanding Notes
may remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10
hereof,
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Notes of at least 10% in
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principal amount of the then outstanding Notes may at the expense of the Company
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.8, the Company's obligations under Section 7.7 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business (including
the trust created by this Indenture) to, another corporation, the successor
corporation without any further act shall be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has, or is a wholly owned subsidiary of a
bank holding company that has, a combined capital and surplus of at least $500
million as set forth in its most recent published annual report of condition.
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This Indenture shall always have a Trustee who satisfies
the requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is
subject to TIA ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
COMPANY.
The Trustee is subject to 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.
SECTION 7.12. RIGHTS OF HOLDERS WITH RESPECT TO TIME, METHOD
AND PLACE.
Subject to the limitations of this Article 7, a majority in
principal amount of the outstanding Notes issued hereunder shall have the right
to direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee, subject to certain exceptions.
SECTION 7.13. TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE
COMPANY.
Any application by the Trustee for written instructions from
the Company may, at the option of the Trustee, set forth in writing any actin
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
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ARTICLE 8
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may, at its option by Board Resolution, at any
time, with respect to the Notes, elect to have either Section 8.2 or Section 8.3
be applied to all Notes and Subsidiary Guarantees then outstanding upon
compliance with the conditions set forth below in this Article Eight.
SECTION 8.2. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 of the option
applicable to this Section 8.2, the Company and the Subsidiary Guarantors, if
any, shall be deemed to have been discharged from their respective obligations
with respect to all Notes and Subsidiary Guarantees then outstanding on the date
the conditions set forth below are satisfied (hereinafter, "defeasance"). For
this purpose, such defeasance means that the Company and any Subsidiary
Guarantor shall be deemed to have paid and discharged the entire indebtedness
represented by the Notes and any Subsidiary Guarantees outstanding, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.5
and the other Sections of this Indenture referred to in (A) and (B) below, and
to have satisfied all its other obligations under such Notes, Subsidiary
Guarantees and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of Notes then outstanding to receive solely
from the trust fund described in Section 8.4 and as more fully set forth in such
Section, payments in respect of the principal of (and premium, if any) and
interest and Liquidated Damages, if any, on such Notes when such payments are
due from the trust fund described in Section 8.4, (B) the Company's obligations
with respect to such Notes under Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.10, 4.2 and
4.3, (C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's obligations in connection therewith and (D) this
Article Eight. Subject to compliance with this Article Eight, the Company may
exercise its option under this Section 8.2 notwithstanding the prior exercise of
its option under Section 8.3 with respect to the Notes.
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SECTION 8.3. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 of the option
applicable to this Section 8.3, the Company and each Subsidiary Guarantor shall
be released from its obligations under the covenants contained in Article Five
and in Sections 4.4, 4.7, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17
and 4.18 with respect to the outstanding Notes and Subsidiary Guarantees, if
any, on and after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"), and the Notes and the Subsidiary
Guarantees, if any, shall thereafter be deemed to be not "outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes and Subsidiary Guarantees, if any, shall not be
deemed outstanding for financial accounting purposes). For this purpose, such
covenant defeasance means that, with respect to the outstanding Notes and
Subsidiary Guarantees, if any, the Company and any Subsidiary Guarantor may omit
to comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a default or an Event
of Default under Sections 6.1(c) and 6.1(d), but, except as specified above, the
remainder of this Indenture and such Notes and Subsidiary Guarantees, if any,
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.1 of the option applicable to Section 8.3, Sections 6.1(c) through
6.1(f) and Section 6.1(i) shall not constitute Events of Default.
SECTION 8.4. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either
Section 8.2 or Section 8.3 to the outstanding Notes and Subsidiary Guarantees:
(i) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S.
dollars, non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm of
independent public
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accountants, to pay the principal of, premium, if any, and interest and
Liquidated Damages, if any, due on the outstanding Notes on the Stated Maturity
thereof or on the applicable Redemption Date, as the case may be, and the
Company must specify whether the Notes are being defeased to maturity or to a
particular redemption date;
(ii) 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 United States Internal
Revenue Service a ruling or (B) since the Issue Date, there has been a change in
the applicable U.S. federal income tax law, in either case to the effect that,
and based thereon such opinion of counsel in the United States shall confirm
that, the Holders of the outstanding Notes will not recognize income, gain or
loss for U.S. federal income tax purposes as a result of such Legal Defeasance
and will be subject to U.S. 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;
(iii) 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 of the
outstanding Notes will not recognize income, gain or loss for U.S. federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to U.S. 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;
(iv) no Default or Event of Default (other than a
Default or Event of Default resulting from the borrowing of funds to be applied
to such deposit) shall have occurred and be continuing on the date of such
deposit or, insofar as Events of Default set forth in Section 6.1(g) and (h), at
any time in the period ending on the 91st day after the date of such deposit;
(v) such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which the
Company or any of its Subsidiaries, if any, is a party or by which the Company
or any of its Subsidiaries, if any, is bound;
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(vi) the Company shall have delivered to the Trustee an
opinion of counsel to the effect that, on 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;
(vii) 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 of the Notes over the other creditors of
the Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or a Subsidiary Guarantor, if any, or others; and
(viii) the Company shall have delivered to the Trustee
an Officers' Certificate and an opinion of counsel in the United States 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.
SECTION 8.5. DEPOSITED MONEY AND U.S. GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section
4.3, all money and non-callable Government Securities (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 8.5, the "Trustee") pursuant to Section 8.4 in
respect of the Notes then outstanding shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Notes of all sums due and to become due thereon in respect of principal
(and premium, if any) and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.4 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Notes then
outstanding.
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Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or non-callable Government Securities held
by it as provided in Section 8.4 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(i)), are in excess of the amount thereof which would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
SECTION 8.6. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.2 or 8.3, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and any Subsidiary Guarantor's obligations under
this Indenture, the Notes and the Subsidiary Guarantees, if any, shall be
revived and reinstated as though no deposit had occurred pursuant to Section 8.2
or 8.3, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.2 or 8.3, as the
case may be; provided, however, that if the Company or any Subsidiary Guarantor
makes any payment of principal of (or premium, if any) or interest on any Note
following the reinstatement of its obligations, the Company or any Subsidiary
Guarantor shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.2 of this Indenture, the Company and
the Trustee may amend or supplement this Indenture or Notes, and with respect to
a Subsidiary Guarantee, the Subsidiary Guarantor under such Subsidiary Guarantee
and the Trustee may amend or supplement such Subsidiary Guarantee, without the
consent of any Holder of a Note:
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(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to
or in place of certificated Notes;
(c) to provide for the assumption of the Company's or any
Subsidiary Guarantor's obligations to the Holders of
the Notes in the case of a merger or consolidation as
provided in Article 5 of this Indenture;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes
(including additional Subsidiary Guarantees) or that
does not adversely affect the legal rights hereunder
of any such Holder; or
(e) to comply with requirements of the Commission in
order to effect or maintain the qualification of this
Indenture under the Trust Indenture Act or to provide
for the succession of a successor Trustee.
Upon the written request of the Company accompanied by
resolutions of the Board of Directors authorizing the execution of any such
amended or supplemental Indenture, and upon receipt by the Trustee of an
Officers' Certificate and an Opinion of Counsel, the Trustee shall join with the
Company and the Subsidiary Guarantors, if any, in the execution of any amended
or supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.2. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.2, this Indenture,
the Notes and a Subsidiary Guarantee, if any, issued hereunder may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding (including consents obtained in connection
with a tender offer or exchange offer for the Notes), and, subject to Sections
6.2, 6.4 and 6.7 hereof, any existing default or compliance with any provision
of this Indenture, the Notes or the
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Subsidiary Guarantees, if any, may be waived with the consent of the Holders of
a majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by resolutions of
the Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of an Officers' Certificate and an Opinion of
Counsel, the Trustee shall join with the Company and the Subsidiary Guarantors,
if any, in the execution of such amended or supplemental Indenture unless such
amended or supplemental Indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
The consent of the Holders is not necessary under this Section
9.2 to approve the particular form of any proposed amendment. It is sufficient
if such consent approves the substance of the proposed amendment.
After an amendment, supplement or waiver under this Section
9.2 becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.4 and 6.7 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture, the Notes or the Subsidiary Guarantees, if any.
However, without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Notes or Subsidiary Guarantee held by a non-consenting
Holder):
(i) reduce the principal amount of the Notes whose Holders
must consent to an amendment, supplement or waiver;
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(ii) reduce the principal of or change the fixed maturity of
any such Note or alter the provisions with respect to the
redemption of the Notes (other than provisions relating
to the covenants described under Sections 4.9 and 4.10);
(iii) reduce the rate of or change the time for payment of
interest or Liquidated Damages, if any, on any Note;
(iv) waive a Default or Event of Default in the payment of
principal of, premium, if any, or interest or Liquidated
Damages, if any, on the Notes (except a rescission of
acceleration of the Notes from a non- payment default by
the Holders of at least a majority in aggregate principal
amount of the Notes and a waiver of the payment default
that resulted from such acceleration);
(v) make any Note payable in money other than that stated in
the Notes;
(vi) make any change in Section 6.4 or 6.7;
(vii) waive a redemption payment with respect to any Note
(other than a payment required by Section 4.9 or Section
4.10); or
(viii) make any change in the foregoing amendment and waiver
provisions of this Article 9.
In addition, any amendment to the provisions of this Indenture
(which relate to subordination) will require the consent of the Holders of at
least 66 2/3% in principal amount of Notes then outstanding if such amendment
would adversely affect the rights of Holders of such Notes; provided, however
that no amendment may be made to the subordination provisions of this Indenture
that adversely affects the rights of any holder of Senior Debt then outstanding
unless the holders of such Senior Debt (or any group or representative thereof
authorized to give a consent) consent to such change.
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SECTION 9.3. COMPLIANCE WITH XXX.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or supplemental Indenture that complies with
the TIA as then in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Xxxxxx's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.5. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may, but shall not be required to, place an
appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Company in exchange for all Notes may issue and
the Trustee shall authenticate new Notes that reflect the amendment, supplement
or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In signing or refusing to sign any amended or
supplemental indenture the Trustee shall be entitled to receive and (subject to
Section 7.1) shall be fully protected in relying upon an Officer's Certificate
and an Opinion of Counsel stating that the execution of such amended or
supplemental indenture is authorized
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or permitted by this Indenture, that it is not inconsistent herewith, and that
it will be valid and binding upon the Company and the Subsidiary Guarantors, if
any, in accordance with its terms.
ARTICLE 10
SUBORDINATION
SECTION 10.1. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note
agrees, that the payment of the Subordinated Note Obligations shall be
subordinated in right of payment, as set forth in this Article 10, to the prior
payment in full in cash of all Senior Debt, whether outstanding on the date
hereof or hereafter incurred.
SECTION 10.2. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution of property or securities to
creditors of the Company in a liquidation or dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property, or in an assignment for the benefit of
creditors or any marshalling of the Company's assets and liabilities, the
holders of Senior Debt shall be entitled to receive payment in full of all
Obligations due in respect of such Senior Debt (including interest after the
commencement of any such proceeding at the rate specified in the applicable
Senior Debt, whether or not a claim for such interest would be allowed in a
proceeding) before the Holders of the Notes will be entitled to receive any
payment with respect to the Notes, and until all Obligations with respect to
Senior Debt are paid in full, any distribution to which the Holders of the Notes
would be entitled shall be made to the holders of Senior Debt (except that
Holders of the Notes may receive payments made from the trust described in
Article 8 hereof).
SECTION 10.3. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company also may not make any payment (whether by
redemption, purchase, retirement, defeasance or otherwise) upon or in respect of
the Notes (except from the trust described in Article 8 hereof) if (i) a default
in the payment of the principal of,
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premium, if any, or interest on Designated Senior Debt occurs ("payment
default") or (ii) any other default occurs and is continuing with respect to
Designated Senior Debt that permits, or with the giving of notice or passage of
time or both (unless cured or waived) will permit, holders of the Designated
Senior Debt as to which such default relates to accelerate its maturity
("non-payment default") and (solely with respect to this clause (ii) ) the
Trustee receives a notice of such default (a "Payment Blockage Notice") from the
Company or the holders of any Designated Senior Debt. Cash payments on the Notes
shall be resumed (a) in the case of a payment default, upon the date on which
such default is cured or waived and (b) in case of a nonpayment default, the
earlier of the date on which such nonpayment default is cured or waived or 179
days after the date on which the applicable Payment Blockage Notice is received,
unless the maturity of any Designated Senior Debt has been accelerated or a
default of the type described in paragraphs (g) or (h) of Section 6.1 hereof has
occurred and is continuing. No new period of payment blockage may be commenced
unless and until 360 days have elapsed since the date of commencement of the
payment blockage period resulting from the immediately prior Payment Blockage
Notice. No nonpayment default in respect of Designated Senior Debt that existed
or was continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice
unless such default shall have been cured or waived for a period of no less than
90 days.
SECTION 10.4. ACCELERATION OF SECURITIES.
If the Company fails to make any payment on the Notes when due
or within any applicable grace period, whether or not on account of the payment
blockage provision referred to above, such failure shall constitute an Event of
Default and shall entitle the holders of the Notes to accelerate the maturity
thereof. The Company shall promptly notify holders of Senior Debt if payment of
the Notes is accelerated because of an Event of Default.
SECTION 10.5. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any
payment of any Subordinated Note Obligations at a time when the Trustee or such
Holder, as applicable, has actual knowledge that such payment is prohibited by
Section 10.2 or 10.3 hereof, such payment shall be held by the Trustee or such
Holder, in trust for
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the benefit of, and shall be paid forthwith over and delivered, upon written
request, to, the holders of Senior Debt as their interests may appear or their
representative under the indenture or other agreement (if any) pursuant to which
such Senior Debt may have been issued, as their respective interests may appear,
for application to the payment of all Obligations with respect to such Senior
Debt remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
In the event that any Holder receives any payment of any
Subordinated Note Obligations at any time when such payment is prohibited by
Section 10.2 or 10.3 hereof, such payment shall be held by such Holder, in trust
for the benefit of, and shall be paid forthwith over and delivered, upon written
request to, the holders of Senior Debt as their interest may appear or their
representative under the indenture or other agreement (if any) pursuant to which
such Senior Debt may have been issued, as their interest may appear, for the
application to the payment of all Obligations with respect to such Senior Debt
remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any holders
of Senior Debt shall be entitled by virtue of this Article 10, except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.
SECTION 10.6. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of any
Subordinated Note Obligations to violate this Article 10, but failure to give
such notice shall not affect the
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subordination of the Notes to the Senior Debt as provided in this Article 10.
SECTION 10.7. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are
paid in full in cash, Holders of Notes shall be subrogated (equally and ratably
with all other Indebtedness pari passu with the Notes) to the rights of holders
of Senior Debt to receive distributions applicable to Senior Debt to the extent
that distributions otherwise payable to the Holders of Notes have been applied
to the payment of Senior Debt. A distribution made under this Article 10 to
holders of Senior Debt that otherwise would have been made to Holders of Notes
is not, as between the Company and Holders, a payment by the Company on the
Senior Debt.
SECTION 10.8. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of
Notes and holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of Notes,
the obligation of the Company, which is absolute and
unconditional, to pay principal of, premium, if any,
and interest and Liquidated Damages on the Notes in
accordance with their terms;
(2) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in
relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or
Event of Default, subject to the rights of holders
and owners of Senior Debt to receive distributions
and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay
principal of, premium, if any, or interest or Liquidated Damages on a Note on
the due date, the failure is nevertheless a Default or an Event of Default.
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SECTION 10.9. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to
their representative.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders of Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Subordinated
Note Obligations to violate this Article 10. Only the Company or a
representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.7 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not the Trustee. Any
Agent may do the same with like rights.
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SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Xxxxxx's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article 10, and appoints the Trustee to act as such Xxxxxx's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.9 hereof at least 30 days before the expiration of the
time to file such claim, a representative of Designated Senior Debt is hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes.
ARTICLE 11
SATISFACTION AND DISCHARGE
SECTION 11.1. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall be discharged and will cease to be of
further effect as to all Notes issued hereunder, when either
(a) all such 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 and thereafter repaid to the Company or
discharged from such trust, as provided in Section
4.3 hereof) have been delivered to the Trustee for
cancellation; or
(b) (i) all such Notes not theretofore delivered
to such Trustee for cancellation have
become due and payable by reason of the
making of a notice of redemption or
otherwise or will become due and payable
within one year and the Company or a
Subsidiary Guarantor, if any, has
irrevocably deposited or caused to be
deposited with such Trustee as trust
funds in trust an amount of money
sufficient to pay and discharge the
entire Obligations in respect of such
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Notes not theretofore delivered to the
Trustee for cancellation to the date of
maturity or redemption;
(ii) no Default or Event of Default with
respect to this Indenture or the Notes
shall have occurred and be continuing on
the date of such deposit or shall occur
as a result of such deposit and such
deposit will not result in a breach or
violation of, or constitute a default
under, any other instrument to which the
Company or a Subsidiary Guarantor, if
any, is a party or by which the Company
or a Subsidiary Guarantor, if any, is
bound;
(iii) the Company or a Subsidiary Guarantor,
if any, has paid or caused to be paid
all sums payable by it under this
Indenture; and
(iv) the Company has delivered irrevocable
instructions to the Trustee under this
Indenture to apply the deposited money
toward the payment of such Notes at
maturity or the redemption date, as the
case may be.
In addition, the Company must deliver an Officers' Certificate
and an opinion of counsel to the Trustee stating that all conditions precedent
to satisfaction and discharge have been satisfied.
SECTION 11.2. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section
4.3, all money deposited with the Trustee pursuant to Section 11.1 shall be held
in trust and applied by it, in accordance with the provisions of the Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
Persons entitled thereto, of the principal (and premium, if any)
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and interest and Liquidated Damages for whose payment such money has been
deposited with the Trustee.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.1 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 such deposit had occurred pursuant to Section 11.1;
provided that if the Company has made any payment of principal of, premium, if
any, or interest on any Notes because of the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or Government Securities held by the Trustee
or Paying Agent.
ARTICLE 12
MISCELLANEOUS
SECTION 12.1. CONFLICT OF ANY PROVISION OF INDENTURE WITH TIA.
If any provision of this Indenture limits, qualifies, or
conflicts with the duties imposed by TIA ss. 318(c), the imposed duties shall
control.
SECTION 12.2. NOTICES.
Any notice or communication by the Company, any Subsidiary
Guarantor or the Trustee to the others is duly given if in writing and delivered
in Person or mailed by first class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery,
to the others' address:
If to the Company or any Subsidiary Guarantor:
The Houston Exploration Company
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Xxxxxxxxx: (000) 000-0000
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With a copy to:
Xxxxxxx & Xxxxx X.X.X.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
If to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
Facsimile: (000) 000-0000
The Company or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA 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 within the time prescribed, it is duly given, whether or not the addressee
receives it.
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If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 12.3. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES.
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 anyone else shall have the protection of
TIA ss. 312(c).
SECTION 12.4. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall
include the statements set forth in Section 1.5
hereof) stating that, in the opinion of the signers,
all conditions precedent and covenants, if any,
provided for in this Indenture relating to the
proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which shall
include the statements set forth in Section 1.5
hereof) stating that, in the opinion of such counsel,
all such conditions precedent and covenants have been
satisfied.
SECTION 12.5. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, any date
established for payment of Defaulted Interest pursuant to Section 2.12, or any
Maturity with respect to any Note shall not be a Business Day, then
(notwithstanding any other provisions of this Indenture, the Notes or any
Subsidiary Guarantee) payment of interest or principal (and premium, if any)
need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on the Interest Payment Date or
date established for payment of Defaulted Interest pursuant to
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Section 2.12 or Maturity, and no interest shall accrue with respect to such
payment for the period from and after such Interest Payment Date or date
established for payment of Defaulted Interest pursuant to Section 2.12 or
Maturity, as the case may be, to the next succeeding Business Day.
SECTION 12.6. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of
the Company or a Subsidiary Guarantor, if any, shall have any liability for any
obligations of the Company or the Subsidiary Guarantors, if any, under the
Notes, the Subsidiary Guarantees, if any, or this Indenture or for any claim
based on, in respect of, or by reason of such obligations or their creation.
Each Holder of the Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Commission that such a waiver
is against public policy.
SECTION 12.7. GOVERNING LAW.
THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES, IF
ANY, SHALL BE, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 12.8. AGENT FOR SERVICE; SUBMISSION TO JURISDICTION;
WAIVER OF IMMUNITIES.
By the execution and delivery of this Indenture or any
amendment or supplement hereto, the Company (i) acknowledges that it has, by
separate written instrument, designated and appointed CT Corporation System (the
"Process Agent") currently located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
as its authorized agent upon which process may be served in any suit, action or
proceeding with respect to, arising out of, or relating to, this Indenture or
the Notes or brought under U.S. federal or state securities laws, may be
instituted in any U.S. federal or state court located in The City of New York,
New York, and acknowledges that the Process Agent has accepted such designation,
(ii) submits to the jurisdiction of any such court in any such suit, action or
proceeding, and (iii)
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agrees that service of process upon the Process Agent shall be deemed in every
respect effective service of process upon the Company in any such suit, action
or proceeding. The Company further agrees to take any and all action, including
the execution and filing of any and all such documents and instruments as may be
necessary to continue such designation and appointment of the Process Agent in
full force and effect so long as this Indenture shall be in full force and
effect; provided that the Company may and shall (to the extent the Process Agent
ceases to be able to be served on the basis contemplated herein), by written
notice to the Trustee, designate such additional or alternative agents for
service of process under this Section 12.8 that (i) maintains an office located
in the Borough of Manhattan, The City of New York in the State of New York, (ii)
are either (a) counsel for the Company or (b) a corporate service company which
acts as agent for service of process for other persons in the ordinary course of
its business and (iii) agrees to act as agent for service of process in
accordance with this Section 12.8. Such notice shall identify the name of such
agent for process and the address of such agent for process in the Borough of
Manhattan, The City of New York, State of New York. Upon the request of any
Holder of a Note, the Trustee shall deliver such information to such Holder.
Notwithstanding the foregoing, there shall, at all times, be at least one agent
for service of process for the Company appointed and acting in accordance with
this Section 12.8.
To the extent that the Company has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Company hereby irrevocably waives such immunity in respect of its obligations
under this Indenture and the Notes, to the extent permitted by law.
SECTION 12.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
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SECTION 12.10. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company
shall bind its respective successors and assigns, whether so expressed or not.
All covenants and agreements in this Indenture by the Trustee shall bind its
respective successors and assigns, whether so expressed or not.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed in New York, New York as of the day and year first
above written.
THE HOUSTON EXPLORATION COMPANY
Dated: March 2, 1998 By: /s/ XXXXX X. XXXXXXXXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxxxxxxxx
Title: Vice President and Secretary
Dated: March 2, 1998 By: /s/ XXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and Treasurer
THE BANK OF NEW YORK
Dated: March 2, 1998 By: /s/ XXXX X. XXXXX
--------------------------------------
Name: Xxxx X. Xxxxx
Title: Assistant Vice President
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EXHIBIT A-1
(Face of Note)
___% Senior Subordinated Notes due 2008
No. Cusip No:
THE HOUSTON EXPLORATION COMPANY
promises to pay to Cede & Co. or registered assigns, the
principal sum of $ ____________________________
Dollars on __________________, 2008.
Interest Payment Dates: ________ and ______________
Record Dates: ____________ and _____________
THE HOUSTON EXPLORATION COMPANY
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
This is one of the ___% Senior Subordinated
Notes due 2008 referred to in
the within-mentioned Indenture:
Dated February __, 1998
The Bank of New York, as Trustee
By:
------------------------------------
Authorized Signature
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(Back of Note)
___% Senior Subordinated Notes due 2008
[Unless and until it is exchanged in whole or in part for
Notes in definitive form, this Note may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("DTC"),
to the issuer 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 may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be 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.](**)
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) (A "QIB"), (B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),(2),(3) OR (7)
OF REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL
NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF
ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING
--------------------
(**) This paragraph should be included only if the Note is a
Global Note.
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FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULES 903 AND 904 OF THE SECURITIES ACT,
(D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND,
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES OF LESS
THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE,
IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING RESTRICTIONS."
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below.
1. INTEREST. The Houston Exploration Company, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
____% per annum from __________, 1998 until ___________ 2008. The Company shall
pay interest semi-annually in arrears on _______ and ________ of each year, or
if any such day is not a Business Day, on the next succeeding Business Day (each
an "Interest Payment Date"). Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the Issue Date; provided that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding
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Interest Payment Date; provided, further, that the first Interest Payment Date
shall be _____________, 1998. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at a rate equal to
the per annum rate on the Notes then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. LIQUIDATED DAMAGES. The holder of this Note is entitled to
the benefits of the Registration Rights Agreement dated as of February __, 1998
among the Company and the Initial Purchasers (the Registration Rights
Agreement").
(a) Except as expressly provided in this paragraph 2,
Liquidated Damages shall be treated as interest and shall be paid to the Holders
entitled thereto on Interest Payment Dates in the manner set forth in paragraph
1 hereof.
(b) Notwithstanding the fact that this Note may cease to be a
Transfer Restricted Security (as defined in the Registration Rights Agreement),
all obligations of the Company to pay Liquidated Damages with respect to this
Note shall survive until such time as such obligations with respect to this Note
shall have been satisfied in full.
(c) In the event that the Company is required to pay
Liquidated Damages pursuant to this paragraph 2, the Company shall notify the
Trustee in writing at least 15 days prior to the first Interest Payment Date
upon which such Liquidated Damages is due; provided that, in the event that the
obligation to pay such Liquidated Damages occurs less than 15 days prior to such
Interest Payment Date, such notice shall be provided by the Company to the
Trustee as soon as reasonably practicable prior to such Interest Payment Date.
3. METHOD OF PAYMENT. The Company shall make payments in
respect of Global Notes (including principal, premium, if any, interest and
Liquidated Damages, if any) by wire transfer of immediately available funds to
the accounts specified by the Note Custodian or, at the option of the Company,
payment of interest
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138
may be made by check mailed to the Holders of the Notes at their respective
addresses set forth in the register of Holders of Notes. Notwithstanding the
foregoing, all payments with respect to the Notes (the Holders of which have
provided wire transfer instructions to the Company at least ten business days
prior to the applicable payment date), will be required to be made by wire
transfer of immediately available funds to the accounts specified by the Holders
thereof. Such payment shall be made in such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts.
4. PAYING AGENT AND REGISTRAR. Initially, The Bank of New
York, the Trustee under the Indenture, will act as Paying Agent and Registrar.
The Notes may be presented for registration of transfer and exchange at the
offices of the Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
5. INDENTURE. The Company issued the Notes under an Indenture
dated as of March 2, 1998 ("Indenture") between the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code xx.xx. 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are general unsecured obligations of the Company limited to
$100,000,000 in aggregate principal amount.
6. OPTIONAL REDEMPTION.
Except as set forth in the next paragraph, the Notes will not
be redeemable at the Company's option prior to ________, 2003. On and after
________, 2003, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
written notice, at the Redemption Prices (expressed as a percentage of principal
amount) set forth below, plus accrued and unpaid interest thereon, if any, to
the applicable redemption date, if redeemed during the twelve-month period
beginning on ________ of each of the years indicated below:
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YEAR REDEMPTION
---- PRICE
----------
2003......................................................................... _______%
2004......................................................................... _______%
2005......................................................................... _______%
2006 and thereafter.......................................................... 100.000%
In addition, at any time on or prior to ____________, 2001 the
Company may, at its option, redeem for cash up to 35% of the aggregate principal
amount of Notes originally issued under the Indenture on the Issue Date at a
Redemption Price equal to [ ]% of the aggregate principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the
Redemption Date, with the net cash proceeds of an Equity Offering; provided that
at least 65% of the aggregate principal amount of Notes originally issued under
the Indenture on the Issue Date remains outstanding immediately after the
occurrence of such redemption; provided further that such redemption occurs
within 90 days of the date of closing of such Equity Offering. The Trustee shall
select the Notes to be purchased in the manner described in the Indenture.
7. MANDATORY REDEMPTION. Other than as set forth in paragraph
9, the Company shall not be required to make mandatory redemption payments with
respect to the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the Redemption Date to each
Holder whose Notes are to be redeemed at its registered address. Notes may be
redeemed in part but only in whole multiples of $1,000. On and after the
Redemption Date interest ceases to accrue on Notes or portions thereof called
for redemption.
9. REPURCHASE AT OPTION OF HOLDERS. (a) Upon the occurrence of
a Change of Control, each Holder of Notes shall have the right to require the
Company to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Notes pursuant to the offer described below (the
"Change
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of Control Offer") at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase (the "Change of Control
Payment"). Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase the Notes pursuant
to the procedures required by the Indenture and described in such notice.
Holders of Notes that are subject to an offer to purchase may elect to have such
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse side of this Note.
(b) On the 361st day after an Asset Sale, if the aggregate
amount of Excess Proceeds exceeds $10.0 million, the Company will be required to
make an offer to all Holders of Notes and, to the extent required by the terms
thereof, to all holders or lenders of Pari Passu Indebtedness (an "Asset Sale
Offer") to purchase the maximum principal amount of Notes and any such Pari
Passu Indebtedness to which the asset sale offer applies that may be purchased
out of the Excess Proceeds, at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest and, with
respect to the Notes or similar securities, Liquidated Damages or comparable
amounts in the case of similar securities, if any, thereon to the date of
purchase, in accordance with the procedures set forth in Section 3.10 of the
Indenture or the agreements governing the Pari Passu Indebtedness, as
applicable. To the extent that the aggregate amount of Notes and Pari Passu
Indebtedness so validly tendered and not properly withdrawn pursuant to an Asset
Sale Offer is less than the Excess Proceeds, the Company may use any remaining
Excess Proceeds for general corporate purposes. If the aggregate principal
amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness
surrendered by holders or lenders thereof, collectively, exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes and Pari Passu Indebtedness
to be purchased on a pro rata basis on the basis of the aggregate principal
amount of the tendered Notes and Pari Passu Indebtedness. Upon completion of
such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Holders of Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Company prior to any related purchase date and may
elect to have such Notes purchased by
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completing the form entitled "Option of Holder to Elect Purchase" on the reverse
side of this Note.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. The transfer of Notes may be registered
and Notes may be exchanged only as provided in Article 2 of the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents (including legal opinions) and
the Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note
may be treated as its owner for all purposes.
12. SUBORDINATION. Each Holder by accepting a Note agrees that
the payment of principal of, premium, if any, and interest on each Note and any
other payment obligations of the Company in respect of the Notes (including any
obligation to repurchase the Notes) is subordinated in right of payment, as set
forth in Article 10 of the Indenture, to the prior payment in full in cash of
all Senior Debt (whether outstanding on the date of the Indenture or thereafter
incurred).
13. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Notes or any Subsidiary Guarantee may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes), and, subject to the
terms of the Indenture and any applicable Subsidiary Guarantee, any existing
default (other than a default in the payment of the principal of, premium, if
any, or interest on, the Notes) or compliance with any provision of the
Indenture, the Notes or any Subsidiary Guarantee may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding
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Notes (including consents obtained in connection with a tender offer or exchange
offer for Notes). Without the consent of any Holder of a Note, the Indenture,
the Notes and any Subsidiary Guarantee may be amended or supplemented to cure
any ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the assumption of
the Company's or any Subsidiary Guarantor's obligations to Holders of the Notes
in the case of a merger or consolidation as provided in Article 5 of the
Indenture, to make any change that would provide any additional rights or
benefits to the Holders of the Notes (including additional Subsidiary
Guarantees) or that does not adversely affect the legal rights under the
Indenture of any such Holder, to comply with the requirements of the Commission
in order to effect or maintain the qualification of the Indenture under the TIA
or to provide for the succession of a successor trustee in compliance with the
requirements of Section 7.10 of the Indenture.
14. DEFAULTS AND REMEDIES. Each of the following constitutes
an "Event of Default": (a) default in payment when due of the principal of or
premium, if any, on the Notes; (b) default for 30 days in the payment when due
of interest on, or Liquidated Damages with respect to, the Notes; (c) failure by
the Company to comply with the provisions described in Sections 4.9, 4.10, 4.11,
or 5.1 of the Indenture; (d) failure by the Company or a Subsidiary Guarantor,
if any, for 60 days after notice from the Trustee or the Holders of at least 25%
in principal amount of the then outstanding Notes to comply with any of its
other agreements in the Indenture, the Notes or the Subsidiary Guarantees, if
any; (e) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries) other than Indebtedness owed to the Company or a Wholly Owned
Subsidiary, whether such Indebtedness or guarantee now exists, or is created
after the date hereof, which default (x) is caused by a failure to pay principal
of or premium, if any, or interest on such Indebtedness prior to the expiration
of the grace period provided in such Indebtedness on the date of such default
unless being contested in good faith by appropriate proceedings (a "Payment
Default") or (y) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal
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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; (f) failure
by the Company or any of its Restricted Subsidiaries to pay final judgments
aggregating in excess of $10 million, which judgments are not paid, discharged
or stayed for a period of 60 days; (g) the Company or any of its Significant
Subsidiaries, or group of Restricted Subsidiaries that, taken together (as of
the latest audited consolidated financial statements for the Company and its
Subsidiaries), would constitute a Significant Subsidiary (such group herein
referred to as a "Significant Group of Subsidiaries"): (i) commences a voluntary
case, (ii) consents to the entry of an order for relief against it in an
involuntary case in which it is the debtor, (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) admits in writing
its inability generally to pay its debts as the same become due; (h) a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against the Company, any of its Significant Subsidiaries, or a
Significant Group of Subsidiaries in an involuntary case in which it is the
debtor, (ii) appoints a Custodian of the Company, any of its Significant
Subsidiaries, or a Significant Group of Subsidiaries or for all or substantially
all of the property of the Company, a Significant Subsidiary or a Significant
Group of Subsidiaries; or (iii) orders the liquidation of the Company, any of
its Significant Subsidiaries, or a Significant Group of Subsidiaries; and the
order or decree contemplated in clauses (i), (ii) or (iii) of this clause (h),
remains unstayed and in effect for 60 consecutive days; or (i) except as
permitted in the Indenture, any Subsidiary Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or a Subsidiary, or any Person acting on behalf
of such Subsidiary, shall deny or disaffirm its obligations under its Subsidiary
Guarantee.
If an Event of Default (other than of a type specified in
clause (g) or (h) in the preceding paragraph) occurs and is continuing under the
Indenture, the Trustee or the Holders of at least 25% in principal amount of the
then outstanding Notes may declare the principal, premium, if any, interest and
any other monetary obligations (including Liquidated Damages) on all the
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then outstanding Notes to be due and payable immediately by notice in writing to
the Company (and the Trustee, if given by the Holders). Upon the effectiveness
of such declaration, such principal, premium, interest and other monetary
obligations will be due and payable immediately. Notwithstanding the foregoing,
in the case of an Event of Default arising under clause (g) or (h) of the
preceding paragraph, all outstanding Notes will become due and payable without
further action or notice. Holders of Notes may not enforce the Indenture or the
Notes except as provided under the Indenture. Subject to certain limitations,
including the provision to the Trustee of an indemnity in accordance with
Section 7.7 of the Indenture, Holders of a majority in principal amount of the
then outstanding Notes may 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 or Event of Default relating to
the payment of principal, premium, if any, or interest) if it determines that
withholding notice is in their interest.
15. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company, and may otherwise deal with the Company, as if
it were not the Trustee.
16. NO RECOURSE AGAINST OTHERS. A director, officer, employee
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under these Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Holder by accepting any of these Notes waives and releases all such liability.
17. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
18. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TENANT
(= 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).
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19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company have
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
The Houston Exploration Company
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Xxxxxxxxx: (000) 000-0000
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or
(we) assign and transfer this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
--------------------------------------------------------------------------------
Date:
------------------------
Your Signature:
-----------------------------------------------
(Sign exactly as your name appears on the face 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 4.9 or 4.10 of the Indenture, check the box below:
[ ] Section 4.9 [ ] Section 4.10
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.9 or Section 4.10 of the Indenture, state
the amount you elect to have purchased:
$
-----------------
Date: Your Signature:
---------------------------- -------------------------------
(Sign exactly as your name appears on the Note)
Tax Identification No.:
-----------------------
Signature Guarantee.
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(***)
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
Principal Xxxxxx
Xxxxxx of decrease in Amount of increase in of this Signature of
Principal Amount Principal Amount Global Note authorized signatory of
of this of this following such decrease Trustee or Note
Date of Exchange Global Note Global Note (or increase) Custodian
----------------------- --------------------- ---------------------- ----------------------- -----------------------
-------------
(***) This should be included only if the Note is a Global Note.
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EXHIBIT A-2
(Face of Unrestricted Note)
___% Senior Subordinated Notes due 2008
No. Cusip No:
THE HOUSTON EXPLORATION COMPANY
promises to pay to Cede & Co. or registered assigns, the
principal sum of $ ____________________________ Dollars on
__________________, 2008.
Interest Payment Dates: ___________ and __________
Record Dates: ____________ and ______________
Dated: _________, 199_
THE HOUSTON EXPLORATION COMPANY
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
This is one of the ___% Senior Subordinated
Notes due 2008 referred to in
the within-mentioned Indenture:
Dated: February __, 1998
The Bank of New York,
as Trustee
By:
-------------------------------------
Authorized Signature
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(Back of Unrestricted Note)
___% Senior Subordinated Notes due 2008
[Unless and until it is exchanged in whole or in part for
Notes in definitive form, this Note may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("DTC"),
to the issuer 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 may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be 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.](****)
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below.
1. INTEREST. The Houston Exploration Company, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
___% per annum from ____________, 1998 until ____________, 2008. The Company
shall pay interest semi-annually in arrears on __________ and __________ of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). Interest on the Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the Issue Date; provided that if there is no existing Default in the
payment of interest, and if this Note is
--------
(****) This paragraph should be included only if the Note is a
Global Note.
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authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be ________ __, 1998. The Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a rate
equal to the per annum rate on the Notes then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT. The Company shall make payments in
respect of Global Notes (including principal, premium, if any, interest and
Liquidated Damages, if any) by wire transfer of immediately available funds to
the accounts specified by the Note Custodian or, at the option of the Company,
payment of interest may be made by check mailed to the Holders of the Notes at
their respective addresses set forth in the register of Holders of Notes.
Notwithstanding the foregoing, all payments with respect to the Notes (the
Holders of which have provided wire transfer instructions to the Company at
least ten business days prior to the applicable payment date), will be required
to be made by wire transfer of immediately available funds to the accounts
specified by the Holders thereof. Such payment shall be made in such coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New
York, the Trustee under the Indenture, will act as Paying Agent and Registrar.
The Notes may be presented for registration of transfer and exchange at the
offices of the Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture
dated as of March 2, 1998 ("Indenture") between the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by
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reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code xx.xx.
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. The Notes are
general unsecured obligations of the Company limited to $100,000,000 in
aggregate principal amount.
5. OPTIONAL REDEMPTION.
Except as set forth in the next paragraph, the Notes will not
be redeemable at the Company's option prior to _____________, 2003. On and after
______________, 2003, the Notes will be subject to redemption at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days'
written notice, at the Redemption Prices (expressed as a percentage of principal
amount) set forth below, plus accrued and unpaid interest thereon, if any, to
the applicable redemption date, if redeemed during the twelve-month period
beginning on ___________ of each of the years indicated below:
REDEMPTION
YEAR PRICE
---- ----------
2003......................................................................... _______%
2004......................................................................... _______%
2005......................................................................... _______%
2006 and thereafter.......................................................... 100.000%
In addition, at any time, on or prior to ________ __, 2001,
the Company may, at its option, redeem for cash up to 35% of the aggregate
principal amount of Notes originally issued under the Indenture on the Issue
Date at a Redemption Price equal to [ ]% of the aggregate principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages thereon, if
any, to the Redemption Date, with the net cash proceeds of an Equity Offering;
provided that at least 65% of the aggregate principal amount of Notes originally
issued under the Indenture on the Issue Date remains outstanding immediately
after the occurrence of such redemption; provided further that such redemption
occurs within 90 days of the date of closing of such Equity Offering.
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The Trustee shall select the Notes to be purchased in the manner described in
the Indenture.
6. MANDATORY REDEMPTION. Other than as set forth in paragraph
8, the Company shall not be required to make mandatory redemption payments with
respect to the Notes.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the Redemption Date to each
Holder whose Notes are to be redeemed at its registered address. Notes may be
redeemed in part but only in whole multiples of $1,000. On and after the
Redemption Date interest ceases to accrue on Notes or portions thereof called
for redemption.
8. REPURCHASE AT OPTION OF HOLDERS. (a) Upon the occurrence of
a Change of Control, each Holder of Notes shall have the right to require the
Company to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Notes pursuant to the offer described below (the
"Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase (the "Change of
Control Payment"). Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder describing the transaction or transactions
that constitute the Change of Control and offering to repurchase the Notes
pursuant to the procedures required by the Indenture and described in such
notice. Holders of Notes that are subject to an offer to purchase may elect to
have such Notes purchased by completing the form entitled "Option of Holder to
Elect Purchase" on the reverse side of this Note.
(b) On the 361st day after an Asset Sale, if the aggregate
amount of Excess Proceeds exceeds $10.0 million, the Company will be required to
make an offer to all Holders of Notes and, to the extent required by the terms
thereof, to all holders or lenders of Pari Passu Indebtedness (an "Asset Sale
Offer") to purchase the maximum principal amount of Notes and any such Pari
Passu Indebtedness to which the asset sale offer applies that may be purchased
out of the Excess Proceeds, at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest and, with
respect to the Notes or similar securities, Liquidated Damages or comparable
amounts
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in the case of similar securities, if any, thereon to the date of purchase, in
accordance with the procedures set forth in Section 3.10 of the Indenture or the
agreements governing the Pari Passu Indebtedness, as applicable. To the extent
that the aggregate amount of Notes and Pari Passu Indebtedness so validly
tendered and not properly withdrawn pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by
holders or lenders thereof, collectively, exceeds the amount of Excess Proceeds,
the Trustee shall select the Notes and Pari Passu Indebtedness to be purchased
on a pro rata basis on the basis of the aggregate principal amount of the
tendered Notes and Pari Passu Indebtedness. Upon completion of such Asset Sale
Offer, the amount of Excess Proceeds shall be reset at zero. Holders of Notes
that are the subject of an offer to purchase will receive an Asset Sale Offer
from the Company prior to any related purchase date and may elect to have such
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse side of this Note.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. The transfer of Notes may be registered
and Notes may be exchanged only as provided in Article 2 of the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents (including legal opinions) and
the Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
11. SUBORDINATION. Each Holder by accepting a Note
agrees that the payment of principal of, premium, if any, and
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155
interest on each Note and any other payment obligations of the Company in
respect of the Notes (including any obligation to repurchase the Notes) is
subordinated in right of payment, as set forth in Article 10 of the Indenture,
to the prior payment in full in cash of all Senior Debt (whether outstanding on
the date of the Indenture or thereafter created).
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Notes or any Subsidiary Guarantee may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes), and, subject to the
terms of the Indenture and any applicable Subsidiary Guarantee, any existing
default (other than a default in the payment of the principal of, premium, if
any, or interest on, the Notes) or compliance with any provision of the
Indenture, the Notes or any Subsidiary Guarantee may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for Notes). Without the consent of any Holder of a Note, the Indenture, the
Notes and any Subsidiary Guarantee may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the assumption of
the Company's or any Subsidiary Guarantor's obligations to Holders of the Notes
in the case of a merger or consolidation as provided in Article 5 of the
Indenture, to make any change that would provide any additional rights or
benefits to the Holders of the Notes (including additional Subsidiary
Guarantees) or that does not adversely affect the legal rights under the
Indenture of any such Holder, to comply with the requirements of the Commission
in order to effect or maintain the qualification of the Indenture under the TIA
or to provide for the succession of a successor trustee in compliance with the
requirements of Section 7.10 of the Indenture.
13. Defaults and Remedies. Each of the following constitutes
an "Event of Default": (a) default in payment when due of the principal of or
premium, if any, on the Notes; (b) default for 30 days in the payment when due
of interest on, or Liquidated Damages with respect to, the Notes; (c) failure by
the Company to comply with the provisions described in Sections 4.9, 4.10, 4.11,
or 5.1 of the Indenture; (d) failure by the
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Company or a Subsidiary Guarantor, if any, for 60 days after notice from the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes to comply with any of its other agreements in the Indenture,
the Notes or the Subsidiary Guarantees, if any;(e) default under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company or any
of its Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries) other than Indebtedness owed to
the Company or a Wholly Owned Subsidiary, whether such Indebtedness or guarantee
now exists, or is created after the date hereof, which default (x) is caused by
a failure to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default unless being contested in good faith by
appropriate proceedings (a "Payment Default") or (y) 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; (f)
failure by the Company or any of its Restricted Subsidiaries to pay final
judgments aggregating in excess of $10 million, which judgments are not paid,
discharged or unstayed for a period of 60 days; (g) the Company or any of its
Significant Subsidiaries, or group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements for the
Company and its Subsidiaries), would constitute a Significant Subsidiary (such
group herein referred to as a "Significant Group of Subsidiaries"): (i)
commences a voluntary case, (ii) consents to the entry of an order for relief
against it in an involuntary case in which it is the debtor, (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) admits in writing its inability generally to pay its debts as the same
become due; (h) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (i) is for relief against the Company, any of its
Significant Subsidiaries, or a Significant Group of Subsidiaries in an
involuntary case in which it is the debtor, (ii) appoints a Custodian of the
Company, any of its Significant Subsidiaries, or a Significant Group of
Subsidiaries or for all or substantially
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all of the property of the Company, a Significant Subsidiary or a Significant
Group of Subsidiaries; or (iii) orders the liquidation of the Company, any of
its Significant Subsidiaries, or a Significant Group of Subsidiaries; and the
order or decree contemplated in clauses (i), (ii) or (iii) of this clause (h),
remains unstayed and in effect for 60 consecutive days; or (i) except as
permitted in the Indenture, any Subsidiary Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or a Subsidiary, or any Person acting on behalf
of such Subsidiary, shall deny or disaffirm its obligations under its Subsidiary
Guarantee.
If an Event of Default (other than of a type specified in
clause (g) or (h) in the preceding paragraph) occurs and is continuing under the
Indenture, the Trustee or the Holders of at least 25% in principal amount of the
then outstanding Notes may declare the principal, premium, if any, interest and
any other monetary obligations (including Liquidated Damages) on all the then
outstanding Notes to be due and payable immediately by notice in writing to the
Company (and the Trustee, if given by the Holders). Upon the effectiveness of
such declaration, such principal, premium, interest and other monetary
obligations will be due and payable immediately. Notwithstanding the foregoing,
in the case of an Event of Default arising under clause (g) or (h) of the
preceding paragraph, all outstanding Notes will become due and payable without
further action or notice. Holders of Notes may not enforce the Indenture or the
Notes except as provided under the Indenture. Subject to certain limitations,
including the provision to the Trustee of an indemnity in accordance with
Section 7.7 of the Indenture, Holders of a majority in principal amount of the
then outstanding Notes may 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 or Event of Default relating to
the payment of principal, premium, if any, or interest) if it determines that
withholding notice is in their interest.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company, and may otherwise deal with the Company, as if
it were not the Trustee.
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15. NO RECOURSE AGAINST OTHERS. A director, officer, employee
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under these Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Holder by accepting any of these Notes waives and releases all such liability.
16. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TENANT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated
by the Committee on Uniform Security Identification Procedures, the Company have
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
The Houston Exploration Company
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Xxxxxxxxx: (000) 000-0000
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EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
The Houston Exploration Company
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
The Bank of New York
Re: ___% Senior Subordinated Notes due 2008 (CUSIP ____)
Reference is hereby made to the Indenture, dated as of
February __, 1998 (the "Indenture"), between The Houston Exploration Company, as
issuer (the "Company"), and The Bank of New York, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
__________________________, (the "Transferor") owns and
proposes to transfer the Note[s] or interest in such Note[s] specified in Annex
A hereto, in the principal amount of $________ in such Note[s] or interests (the
"Transfer"), to (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
144A GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Restricted Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Restricted
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Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Restricted
Definitive Note will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the 144A Global Note and/or the
Restricted Definitive Note and in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE REGULATION S GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE
PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in
accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly,
the Transferor hereby further certifies that (i) the Transfer is not being made
to a person in the United States and (x) at the time the buy order was
originated, the Transferee was outside the United States or such Transferor and
any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed in,
on or through the facilities of a designated offshore securities market and
neither such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Restricted Definitive Note will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Global
Note and/or the Definitive Note and in the Indenture and the Securities Act.
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3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY
OF A RESTRICTED DEFINITIVE NOTE OR RESTRICTED GLOBAL NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act and any applicable blue sky securities laws of any state of
the United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
Subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in compliance
with the prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904,
and the Transferor hereby further certifies that the Transfer complies with the
transfer restrictions applicable to Restricted Definitive Notes and the
requirements of the exemption claimed, which certification is supported by a
certificate executed by the Transferee in the form of Exhibit D to the
Indenture. Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Restricted
Definitive Note will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Notes and in
the Indenture and the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
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(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Unrestricted Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S.
(i) The Transfer is being effected pursuant to and in accordance with Rule 903
or Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Unrestricted Definitive Note will no longer be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION.
(i) The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act other than
Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
State of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Unrestricted Definitive Note will not be subject to the
restrictions on transfer enumerated in the Private
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Placement Legend printed on the Restricted Global Notes or Restricted Definitive
Notes and in the Indenture.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
-------------------------------
[Insert Name of Transferor]
By:
----------------------------
Name:
Title:
Dated: ,
---------------- ----
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ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _____), or
(ii) [ ] Regulation S Global Note
(CUSIP/CINS _____), or
(b) [ ] Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _____), or
(ii) [ ] Regulation S Global Note
(CUSIP/CINS _____), or
(iii) [ ] Unrestricted Global Note (CUSIP
_____); or
(b) [ ] Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
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EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
The Houston Exploration Company
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
The Bank of New York
Re: ___% Senior Subordinated Notes due 2008 (CUSIP )
Reference is hereby made to the Indenture, dated as of February ___,
1998 (the "Indenture"), between The Houston Exploration Company, as issuer (the
"Company"), and The Bank of New York, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
_______________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$___________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE
NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the United States
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Securities Act of 1933, as amended (the "Securities Act"), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive Note is
being acquired in compliance with any applicable blue sky securities laws of any
state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the
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Unrestricted Definitive Note is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the Unrestricted
Definitive Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the [CHECK ONE] 144A Global Note or Regulation S Global Note or IAI Global Note,
with an equal principal amount, the Owner hereby certifies (i) such Owner
acquired such Restricted Definitive Note in a transaction pursuant to Rule 144A
or Regulation S or another exemption from the registration requirements of the
Securities Act, (ii) the beneficial interest is being acquired for the Owner's
own account without transfer and (iii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the Securities Act, and in
compliance with any applicable blue sky securities laws of any state of the
United
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States. Upon consummation of the proposed Exchange in accordance with the terms
of the Indenture, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the relevant Restricted Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
-------------------------------
[Insert Name of Owner]
By:
----------------------------
Name:
Title:
Dated: ,
---------------- ----
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EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
The Houston Exploration Company
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
The Bank of New York
Re: 8-5/8% Senior Subordinated Notes due 2008
Reference is xxxxxx made to the Indenture, dated as of March
2, 1998 (the "Indenture"), between The Houston Exploration Company, as issuer
(the "Company"), and The Bank of New York, as trustee. Capitalized terms used
but not defined herein shall
have the meanings given to them in the Indenture.
In connection with our proposed purchase of $__________
aggregate principal amount of Notes we confirm that:
1. We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the Notes have not been registered under
the Securities Act, and that the Notes and any interest therein may not be
offered or sold except as permitted in the following sentence. We agree, on our
own behalf and on behalf of each account for which we acquire any Notes (for
which are acting as hereinafter stated), that such Notes may be offered, resold,
pledged or otherwise transferred only (i) to a person whom we reasonably believe
is a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, (ii) in
an offshore transaction complying with Rule 903 or Rule 904 of Regulation S,
(iii) pursuant to an exemption from registration
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under the Securities Act provided by Rule 144 thereunder (if available), (iv) to
an institutional "accredited investor" (as defined in Rule 501 (a) (1), (2), (3)
or (7) of Regulation D under the Securities Act) that, prior to such transfer,
furnishes the trustee a signed letter containing certain representations and
agreements relating to the transfer of the Notes and, if such transfer is in
respect of an aggregate principal amount of Notes less than $250,000, an opinion
of counsel, (v) in accordance with another exemption from the registration
requirements of the Securities Act (and based upon an opinion of counsel
acceptable to the Company), (vi) to the Company or (vii) pursuant to an
effective registration statement under the Securities Act, and, in each case, in
accordance with all applicable U.S. state securities laws. We further agree to
provide to any person purchasing the Definitive Note or a beneficial interest in
a Global Note from us in a transaction meeting the requirements of the preceding
sentence a notice advising such purchaser that resales thereof are restricted as
stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company 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 its investment.
5. We are acquiring the Notes without a view to distribution
thereof in violation of the Securities Act for our own 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.
Upon transfer, the Notes would be registered in the name of
the new beneficial owner as follows:
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Name:
--------------------------------------------------
Address:
--------------------------------------------------
Taxpayer ID Number:
---------------------------------------
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
------------------------------------
[Insert Name of Accredited Investor]
By:
---------------------------------
Name:
Title:
Dated: ,
---------------- ----
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EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE TO BE
DELIVERED BY SUBSIDIARY GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated
as of ____________________, between ____________________ (the "Subsidiary
Guarantor"), a subsidiary of The Houston Exploration Company (or its successor),
a company incorporated under the laws of the State of Delaware (the "Company"),
and The Bank of New York, a New York banking corporation, as trustee under the
indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to
the Trustee an indenture (the "Indenture"), dated as of February __, 1998
providing for the issuance of an aggregate principal amount at maturity of
$150,000,000 of ___% Senior Subordinated Notes due 2008 (the "Notes");
WHEREAS, Section 4.15 of the Indenture provides that, under
certain circumstances, the Company is required to cause the Subsidiary Guarantor
to execute and deliver to the Trustee a Subsidiary Guarantee on the terms and
conditions set forth herein; and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee
is authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Subsidiary Guarantor and the Trustee mutually covenant and
agree for the equal and ratable benefit of the holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings as assigned to them in the
Indenture.
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2. INDENTURE PROVISION PURSUANT TO WHICH GUARANTEE IS GIVEN.
This Supplemental Indenture is being executed and delivered pursuant to Section
4.15 of the Indenture.
3. AGREEMENTS TO GUARANTEE. The Subsidiary Guarantor hereby
agrees as follows:
(a) The Subsidiary Guarantor, jointly and severally with all
other Subsidiary Guarantors, if any, unconditionally guarantees to each Holder
of a Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, regardless of the validity and enforceability of the
Indenture, the Notes and the Obligations of the Company under the Indenture and
the Notes, that:
(i) the principal of, premium, if any, and interest
and Liquidated Damages on the Notes shall be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and interest on
the overdue principal of, premium, if any, and interest and Liquidated Damages
on the Notes, to the extent lawful, and all other obligations of the Company to
the Holders or the Trustee thereunder shall be promptly paid in full, all in
accordance with the terms thereof; and
(ii) in case of any extension of time for payment or
renewal of any Notes or any of such other obligations, that the same shall be
promptly paid in full when due in accordance with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration or otherwise.
Notwithstanding the foregoing, in the event that this
Subsidiary Guarantee would constitute or result in a violation of any applicable
fraudulent conveyance or similar law of any relevant jurisdiction, the liability
of the Subsidiary Guarantor under this Supplemental Indenture and its Subsidiary
Guarantee shall be limited to such amount as will not, after giving effect
thereto, and to all other liabilities of the Subsidiary Guarantor, result in
such amount constituting a fraudulent transfer or conveyance.
4. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES
(a) To evidence its Subsidiary Guarantee set forth in
this Supplemental Indenture, the Subsidiary Guarantor hereby
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agrees that a notation of such Subsidiary Guarantee substantially in the form of
Annex A hereto shall be endorsed by an officer of such Subsidiary Guarantor on
each Note authenticated and delivered by the Trustee after the date hereof.
(b) Notwithstanding the foregoing, the Subsidiary Guarantor
hereby agrees that its Subsidiary Guarantee set forth herein shall remain in
full force and effect notwithstanding any failure to endorse on each Note a
notation of such Subsidiary Guarantee.
(c) If an officer whose signature is on this Supplemental
Indenture or on the Subsidiary Guarantee no longer holds that office at the time
the Trustee authenticates the Note on which a Subsidiary Guarantee is endorsed,
the Subsidiary Guarantee shall be valid nevertheless.
(d) The delivery of the Note by the Trustee, after the
authentication thereof under the Indenture, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Supplemental Indenture on behalf of the
Subsidiary Guarantor.
(e) The Subsidiary Guarantor hereby agrees that its
obligations hereunder shall be unconditional, regardless of the validity,
regularity or enforceability of the Notes or the Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the Notes
with respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor.
(f) The Subsidiary Guarantor hereby waives 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 Subsidiary Guarantee made pursuant to this Supplemental Indenture will
not be discharged except by complete performance of the obligations contained in
the Notes and the Indenture or pursuant to Section 5(b) of this Supplemental
Indenture.
(g) If the Trustee or any Holder has instituted any proceeding
to enforce any right or remedy under this Supplemental
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Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then, and in
every such case, subject to any determination in such proceeding, the Subsidiary
Guarantor, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Subsidiary Guarantor, the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
(h) The Subsidiary Guarantor hereby waives and will not in any
manner whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Subsidiary Guarantor as a result of any payment by such Subsidiary
Guarantor under its Subsidiary Guarantee. The Subsidiary Guarantor further
agrees that, as between the Subsidiary Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand:
(i) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article Six of the Indenture for the
purposes of the Subsidiary Guarantee made pursuant to this Supplemental
Indenture, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Obligations guaranteed hereby; and
(ii) in the event of any declaration of acceleration
of such obligations as provided in Article Six, such obligations (whether or not
due and payable) shall forthwith become due and payable by the Subsidiary
Guarantor for the purpose of the Subsidiary Guarantee made pursuant to this
Supplemental Indenture.
(i) Upon payment of all the Obligations in respect of the
Notes and the Indenture, the Subsidiary Guarantor shall have the right to seek
contribution from any other non-paying Subsidiary Guarantor.
(j) The Subsidiary Guarantor covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
which
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may affect the covenants or the performance of the Indenture or this Subsidiary
Guarantee; and the Subsidiary Guarantor (to the extent that it may lawfully do
so) 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.
5. SUBSIDIARY GUARANTOR MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS
(a) Except as set forth in Articles Four and Five of the
Indenture, nothing contained in the Indenture, this Supplemental Indenture or in
the Notes shall prevent any consolidation or merger of the Subsidiary Guarantor
with or into the Company or any other Subsidiary Guarantor or shall prevent any
transfer, sale or conveyance of the property of the Subsidiary Guarantor as an
entirety or substantially as an entirety, to the Company or any other Subsidiary
Guarantor.
(b) Except as set forth in Article Five of the Indenture, upon
the sale or other disposition of all or substantially all of the assets of the
Subsidiary Guarantor to a third party (in each case, other than to an Affiliate
of the Company) by way of a merger, consolidation or otherwise, or a sale or
other disposition of all of the Capital Stock of the Subsidiary Guarantor, then
the Subsidiary Guarantor (in the event of a sale or other disposition of all or
substantially all of the assets of the Subsidiary Guarantor), the Subsidiary
Guarantor shall be deemed automatically and unconditionally released and
discharged from all obligations under this Subsidiary Guarantee without any
further action required on the part of the Trustee or any Holder if no Default
shall have occurred and be continuing; provided, that in the event of an Asset
Sale, the Net Cash Proceeds therefrom are treated in accordance with Section
4.10 of the Indenture. Upon receipt of an Officer's Certificate of the Company
or the Subsidiary Guarantor, as the case may be, to the effect that the Company
or such Subsidiary Guarantor has complied with the first sentence of this
Section 5(b), the Trustee shall execute any documents reasonably requested by
the Company or the Subsidiary Guarantor, at the cost of the Company or such
Subsidiary Guarantor, as the case may be, in order to evidence the release of
such Subsidiary Guarantor from its obligations
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under its Guarantee endorsed on the Notes and under the Indenture
and this Supplemental Indenture.
(c) Subject to the first sentence of Section 5(b), the
Subsidiary Guarantor shall not consolidate with, or merge with or into (whether
or not the Subsidiary Guarantor is the surviving person), another Person other
than the Company or another Subsidiary Guarantor whether or not affiliated with
such Subsidiary Guarantor, unless (i) the Person formed by or surviving any such
consolidation or merger (if other than such Subsidiary Guarantor) assumes all
the obligations of such Subsidiary Guarantor pursuant to a supplemental
indenture in form and substance satisfactory to the Trustee in respect of the
Notes, this Supplemental Indenture and the Subsidiary Guarantee made pursuant
hereto; (ii) immediately after giving effect to such transaction, no Default or
Event of Default exists; and (iii) the Company delivers to the Trustee an
Officers' Certificate and an Opinion of Counsel addressed to the Trustee with
respect to the foregoing matters.
6. RELEASES UPON RELEASE OF GUARANTEE OF GUARANTEED
INDEBTEDNESS. Concurrently with the releasee or discharge of the Subsidiary
Guarantor's guarantee of the payment of Indebtedness which gave rise to the
delivery of this Supplemental Indenture in accordance with Section 4.15 of the
Indenture ("Guaranteed Indebtedness") (other than a release or discharge by or
as a result of payment under such guarantee of Guaranteed Indebtedness), the
Subsidiary Guarantor shall be automatically and unconditionally released and
relieved of its obligations under this Supplemental Indenture and its Subsidiary
Guarantee made pursuant to Section 4 of this Supplemental Indenture. Upon
delivery by the Company to the Trustee of an Officer's Certificate to the effect
that such release or discharge has occurred, the Trustee shall execute any
documents reasonably required in order to evidence the release of the Subsidiary
Guarantor from its obligations under this Supplemental Indenture and its
Subsidiary Guarantee made pursuant hereto; provided such documents shall not
affect or impair the rights of the Trustee and Paying Agent under Section 7.7 of
the Indenture.
7. SUBORDINATION.
(a) AGREEMENT TO SUBORDINATE. The Subsidiary
Guarantor agrees, and each Holder by accepting this Subsidiary
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Guarantee agrees, that the payment of the Subordinated Note Obligations by the
Subsidiary Guarantor shall be subordinated in right of payment, as set forth in
this Section 7, to the prior payment in full in cash of all Senior Debt of such
Subsidiary Guarantor whether outstanding on the date hereof or hereafter
incurred.
(b) LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any payment or
distribution of property or securities to creditors of the Subsidiary Guarantor
in a liquidation or dissolution of the Subsidiary Guarantor or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Subsidiary Guarantor or its property, or in an assignment for the benefit of
creditors or any marshalling of the Subsidiary Guarantor's assets and
liabilities, the holders of Senior Debt of such Subsidiary Guarantor shall be
entitled to receive payment in full of all Obligations due in respect of such
Senior Debt (including interest after the commencement of any such proceeding at
the rate specified in the applicable Senior Debt, whether or not a claim for
such interest would be allowed in a proceeding) before the Holders of the Notes
will be entitled to receive any payment from the Subsidiary Guarantor with
respect to the Notes, and until all Obligations with respect to such Senior Debt
are paid in full, any distribution to which the Holders of the Notes would be
entitled to receive from the Subsidiary Guarantor shall be made to the holders
of such Subsidiary Guarantor's Senior Debt (except that Holders of the Notes may
receive payments made from the trust described in Article 8 of the Indenture.
(c) DEFAULT ON DESIGNATED SENIOR DEBT. The Subsidiary
Guarantor also may not make any payment (whether by redemption, purchase,
retirement, defeasance or otherwise) upon or in respect of the Notes (except
from the trust described in Article 8 of the Indenture) if (i) a default in the
payment of the principal of, premium, if any, or interest on Guarantor
Designated Senior Debt (as defined below) of the Subsidiary Guarantor occurs
("payment default") or (ii) any other default occurs and is continuing with
respect to Guarantor Designated Senior Debt of the Subsidiary Guarantor that
permits, or with the giving of notice or passage of time or both (unless cured
or waived) will permit, holders of such Guarantor Designated Senior Debt as to
which such default relates to accelerate its maturity ("non-payment default")
and (solely with respect to this clause (ii) ) the Trustee receives a notice of
such default (a "Payment Blockage Notice") from the
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holders or representatives of such Guarantor Designated Senior Debt of the
Subsidiary Guarantor. Cash payments on the Notes from the Subsidiary Guarantor
shall be resumed (a) in the case of a payment default, upon the date on which
such default is cured or waived and (b) in case of a nonpayment default, the
earlier of the date on which such nonpayment default is cured or waived or 179
days after the date on which the applicable Payment Blockage Notice is received,
unless the maturity of any Guarantor Designated Senior Debt of the Subsidiary
Guarantor or Designated Senior Debt of the Company has been accelerated or a
default of the type described in paragraph (g) or (h) of Section 6.1 of the
Indenture has occurred and is continuing. No new period of payment blockage may
be commenced unless and until 360 days have elapsed since the date of
commencement of the payment blockage period resulting from the immediately prior
Payment Blockage Notice. No nonpayment default in respect of Designated Senior
Debt of the Subsidiary Guarantor that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice unless such default shall have
been cured or waived for a period of no less than 90 days. "Guarantor Designated
Senior Debt" means (i) Indebtedness of the Subsidiary Guarantor under the Credit
Agreement and (ii) any Senior Debt of the Subsidiary Guarantor permitted under
the Indenture which at the date of determination, has an aggregate principal
amount outstanding of, or under which, at the date of determination, the holders
thereof are committed to lend up to $25 million and is specifically designated
by the Subsidiary Guarantor in the instrument evidencing or governing such
Senior Debt as "Guarantor Designated Senior Debt" for purposes of this
Supplemental Indenture.
(d) ACCELERATION OF SECURITIES. If the Subsidiary Guarantor
fails to make any payment on the Notes when due or within any applicable grace
period, whether or not on account of the payment blockage provision referred to
above, such failure shall constitute an Event of Default and shall entitle the
holders of the Notes to accelerate the maturity thereof. The Subsidiary
Guarantor shall promptly notify holders of Senior Debt of the Subsidiary
Guarantor if payment of the Notes is accelerated because of an Event of Default.
(e) WHEN DISTRIBUTION MUST BE PAID OVER. In the event that
the Trustee or any Holder receives any payment of any
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Subordinated Note Obligations at a time when the Trustee or such Holder, as
applicable, has actual knowledge that such payment is prohibited by Section 7(b)
or 7(c) hereof, such payment shall be held by the Trustee or such Holder, in
trust for the benefit of, and shall be paid forthwith over and delivered, upon
written request, to, the holders of Senior Debt of the Subsidiary Guarantor as
their interests may appear or their representative under the indenture or other
agreement (if any) pursuant to which such Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of all
Obligations with respect to such Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt of the Subsidiary Guarantor.
In the event that any Holder receives any payment of any
Subordinated Note Obligations at any time when such payment is prohibited by
Section 7(b) or 7(c) hereof, such payment shall be held by such Holder, in trust
for the benefit of, and shall be paid forthwith over and delivered, upon written
request to, the Holders of Senior Debt of the Subsidiary Guarantor as their
interest may appear or their representative under the indenture or other
agreement (if any) pursuant to which such Senior Debt may have been issued, as
their interest may appear, for the application to the payment of all Obligations
with respect to such Senior Debt remaining unpaid to the extent necessary to pay
such Obligations in full in accordance with their terms, after giving effect to
any concurrent payment or distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt of the Subsidiary
Guarantor, the Trustee undertakes to perform only such obligations on the part
of the Trustee as are specifically set forth in this Section 7, and no implied
covenants or obligations with respect to the holders of Senior Debt of the
Subsidiary Guarantor shall be read into the Indenture or this Subsidiary
Guarantee against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt of the Subsidiary Guarantor, and
shall not be liable to any such holders if the Trustee shall pay over or
distribute to or on behalf of Holders or the Subsidiary Guarantor or any other
Person money or assets to which any holders of Senior Debt of the Subsidiary
Guarantor shall be entitled by virtue of this Section 7, except
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if such payment is made as a result of the willful misconduct or
gross negligence of the Trustee.
(f) NOTICE BY SUBSIDIARY GUARANTOR. The Subsidiary Guarantor
shall promptly notify the Trustee and the Paying Agent of any facts known to the
Subsidiary Guarantor that would cause a payment of any Subordinated Note
Obligations to violate this Section 7, but failure to give such notice shall not
affect the subordination of this Subsidiary Guarantee to the Senior Debt of the
Subsidiary Guarantor as provided in this Section 7.
(g) SUBROGATION. After all the Senior Debt of the Subsidiary
Guarantor is paid in full and until the Notes are paid in full in cash, Holders
of Notes shall be subrogated (equally and ratably with all other Indebtedness
pari passu with the Notes) to the rights of holders of such Senior Debt of the
Subsidiary Guarantor to receive distributions applicable to Senior Debt of the
Subsidiary Guarantor to the extent that distributions otherwise payable to the
Holders of Notes have been applied to the payment of Senior Debt of the
Subsidiary Guarantor. A distribution made under this Section 7 to holders of
Senior Debt of the Subsidiary Guarantor that otherwise would have been made to
Holders of Notes is not, as between the Subsidiary Guarantor and Holders, a
payment by the Subsidiary Guarantor on the Senior Debt of the Subsidiary
Guarantor.
(h) RELATIVE RIGHTS. This Section 7 defines the relative
rights of Holders of Notes and holders of Senior Debt of the Subsidiary
Guarantor. Nothing in this Subsidiary Guarantee shall:
(a) impair, as between the Subsidiary Guarantor and
Holders of Notes, the obligation of the Subsidiary
Guarantor, which is absolute and unconditional, to
pay principal of, premium, if any, and interest and
Liquidated Damages on the Notes in accordance with
their terms;
(b) affect the relative rights of Holders of Notes and
creditors of the Subsidiary Guarantor other than
their rights in relation to holders of Senior Debt of
the Subsidiary Guarantor; or
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(c) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or
Event of Default, subject to the rights of holders
and owners of Senior Debt of the Subsidiary Guarantor
to receive distributions and payments otherwise
payable to Holders of Notes.
If the Subsidiary Guarantor fails because of this Section 7 to
pay principal of, premium, if any, or interest and Liquidated Damages on a Note
on the due date, the failure is nevertheless a Default or an Event of Default.
(i) SUBORDINATION MAY NOT BE IMPAIRED BY SUBSIDIARY GUARANTOR.
No right of any holder of Senior Debt of the Subsidiary Guarantor to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Subsidiary Guarantor or any Holder or by the
failure of the Subsidiary Guarantor or any Holder to comply with this Subsidiary
Guarantee.
(j) DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Debt of the
Subsidiary Guarantor, the distribution may be made and the notice given to their
representative.
Upon any payment or distribution of assets of the Subsidiary
Guarantor referred to in this Section 7, the Trustee and the Holders of Notes
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt of
the Subsidiary Guarantor and other Indebtedness of the Subsidiary Guarantor, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Section 7.
(k) RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding the
provisions of this Section 7 or any other provision of this Subsidiary Guarantee
or the Indenture, the Trustee shall not be charged with knowledge of the
existence of
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any facts that would prohibit the making of any payment or distribution by the
Trustee, and the Trustee and the Paying Agent may continue to make payments on
the Notes, unless the Trustee shall have received at its Corporate Trust Office
at least five Business Days prior to the date of such payment written notice of
facts that would cause the payment of any Subordinated Note Obligations to
violate this Section 7. Only the Subsidiary Guarantor or a representative may
give the notice. Nothing in this Section 7 shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.7 of the Indenture.
The Trustee in its individual or any other capacity may hold
Senior Debt of the Subsidiary Guarantor with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights.
(l) AUTHORIZATION TO EFFECT SUBORDINATION. Each Holder of
Notes, by the Holder's acceptance thereof, authorizes and directs the Trustee on
such Xxxxxx's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Section 7, and appoints the
Trustee to act as such Xxxxxx's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in Section 6.9 of the Indenture at
least 30 days before the expiration of the time to file such claim, a
representative of Designated Senior Debt of the Subsidiary Guarantor is hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes.
8. NEW YORK LAW TO GOVERN. The internal law of the
State of New York shall govern and be used to construe this
Supplemental Indenture.
9. COUNTERPARTS. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement.
10. EFFECT OF HEADINGS. The Section headings herein are
for convenience only and shall not affect the construction hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
Dated:___________________, ____ [SUBSIDIARY GUARANTOR]
By:__________________________
Name:
Title:
Dated:___________________, ____
as Trustee
By:__________________________
Name:
Title:
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ANNEX A TO SUPPLEMENTAL INDENTURE
FORM OF NOTATION OF SUBSIDIARY GUARANTEE ON NOTE
Each Subsidiary Guarantor (as defined in the Indenture) has
jointly and severally unconditionally guaranteed (a) the due and punctual
payment of the principal of, premium, if any, and interest on the Notes, whether
at Stated Maturity or an Interest Payment Date, by acceleration, call for
redemption or otherwise, (b) the due and punctual payment of interest on the
overdue principal and premium of, and interest, to the extent lawful, on the
Notes and (c) that in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, the same will be promptly paid in full
when due in accordance with the terms of the extension of renewal, whether at
Stated Maturity, by acceleration or otherwise.
Notwithstanding the foregoing, in the event that the
Subsidiary Guarantee would constitute or result in a violation of any applicable
fraudulent conveyance or similar law of any relevant jurisdiction, the liability
of the Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to
such amount as will not, after giving effect thereto, and to all other
liabilities of the Subsidiary Guarantor, result in such amount constituting a
fraudulent transfer or conveyance.
The Subsidiary Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the Note upon which the
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual or facsimile signature of one of its authorized
officers.
Dated:___________________, ____ [SUBSIDIARY GUARANTOR]
By:__________________________
Name:
Title:
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