1
EXHIBIT 4.1
EXECUTION COPY
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STONE ENERGY CORPORATION
8 3/4% Senior Subordinated Notes due 2007
___________________________________________
INDENTURE
Dated as of September 19, 1997
__________________________________________
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
Trustee
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TABLE OF CONTENTS
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ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 1.03. Incorporation by Reference
of Trust Indenture Act . . . . . . . . . . . . . . . . . . . . 32
SECTION 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 2
The Securities
SECTION 2.01. Amount of Securities; Issuable in
Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.02. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.03. Execution and Authentication . . . . . . . . . . . . . . . . . . 35
SECTION 2.04. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . 36
SECTION 2.05. Paying Agent To Hold Money in Trust . . . . . . . . . . . . . . 36
SECTION 2.06. Securityholder Lists . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.07. Replacement Securities . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.08. Outstanding Securities . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.09. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 2.10. Cancelation . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 2.11. Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 2.12. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.02. Selection of Securities To Be
Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.03. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . 40
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SECTION 3.04. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . 40
SECTION 3.05. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . 41
SECTION 3.06. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . 41
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.02. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.03. Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . 42
SECTION 4.04. Limitation on Restricted Payments . . . . . . . . . . . . . . . 42
SECTION 4.05. Limitation on Restrictions on
Distributions from Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 4.06. Limitation on Asset Sales . . . . . . . . . . . . . . . . . . . . 47
SECTION 4.07. Limitation on Transactions with Affiliates . . . . . . . . . . . 51
SECTION 4.08. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . 52
SECTION 4.09. Change of Control . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 4.10. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 4.11. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . 55
SECTION 4.12. Further Instruments and Acts . . . . . . . . . . . . . . . . . . 55
SECTION 4.13. Future Subsidiary Guarantors . . . . . . . . . . . . . . . . . . 55
SECTION 4.14. Incurrence of Layered Indebtedness . . . . . . . . . . . . . . . 56
SECTION 4.15. Restricted and Unrestricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 5.02. When a Subsidiary Guarantor May
Merge or Transfer Assets . . . . . . . . . . . . . . . . . . . 58
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ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . 62
SECTION 6.05. Control by Majority . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 6.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.07. Rights of Holders To Receive
Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . 64
SECTION 6.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . 64
SECTION 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . 65
SECTION 6.12. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . 65
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . 67
SECTION 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 7.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 7.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . 68
SECTION 7.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . 68
SECTION 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . 69
SECTION 7.09. Successor Trustee by Merger . . . . . . . . . . . . . . . . . . 70
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . 70
SECTION 7.11. Preferential Collection
of Claims Against Company . . . . . . . . . . . . . . . . . . 71
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securi-
ties; Defeasance . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 8.02. Conditions to Defeasance . . . . . . . . . . . . . . . . . . . . 72
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SECTION 8.03. Application of Trust Money . . . . . . . . . . . . . . . . . . . 74
SECTION 8.04. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.05. Indemnity for Government
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.06. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders . . . . . . . . . . . . . . . . . . . 75
SECTION 9.02. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . 76
SECTION 9.03. Compliance with Trust Indenture Act . . . . . . . . . . . . . . 77
SECTION 9.04. Revocation and Effect of
Consents and Waivers . . . . . . . . . . . . . . . . . . . . . 78
SECTION 9.05. Notation on or Exchange of
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 9.06. Trustee To Sign Amendments . . . . . . . . . . . . . . . . . . . 78
SECTION 9.07. Payment for Consent . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE 10
Subordination
SECTION 10.01. Agreement To Subordinate . . . . . . . . . . . . . . . . . . . . 78
SECTION 10.02. Liquidation, Dissolution, Bankruptcy . . . . . . . . . . . . . . 79
SECTION 10.03. Default on Senior Indebtedness . . . . . . . . . . . . . . . . . 79
SECTION 10.04. Acceleration of Payment of
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 10.05. When Distribution Must Be Paid Over . . . . . . . . . . . . . . 80
SECTION 10.06. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 10.07. Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 10.08. Subordination May Not Be Impaired
by Company . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 10.09. Rights of Trustee and Paying Agent . . . . . . . . . . . . . . . 81
SECTION 10.10. Distribution or Notice to
Representative . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 10.11. Article 10 Not To Prevent Events
of Default or Limit Right To
Accelerate . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 10.12. Trust Moneys Not Subordinated . . . . . . . . . . . . . . . . . 82
SECTION 10.13. Trustee Entitled To Rely . . . . . . . . . . . . . . . . . . . . 82
SECTION 10.14. Trustee To Effectuate Subordination . . . . . . . . . . . . . . . 83
SECTION 10.15. Trustee Not Fiduciary for Holders
of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . 83
SECTION 10.16. Reliance by Holders of Senior
Indebtedness on Subordination
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . 83
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ARTICLE 11
Subsidiary Guaranties
SECTION 11.01. Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 11.02. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 11.03. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 86
SECTION 11.04. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 11.05. Modification . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 11.06. Execution of Supplemental
Indenture for Future Subsidiary
Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . 87
ARTICLE 12
Subordination of Subsidiary Guaranties
SECTION 12.01. Agreement To Subordinate . . . . . . . . . . . . . . . . . . . . 87
SECTION 12.02. Liquidation, Dissolution, Bankruptcy . . . . . . . . . . . . . . 88
SECTION 12.03. Default on Senior Indebtedness of
Subsidiary Guarantor . . . . . . . . . . . . . . . . . . . . . 88
SECTION 12.04. Demand for Payment . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 12.05. When Distribution Must Be Paid Over . . . . . . . . . . . . . . 89
SECTION 12.06. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 12.07. Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 12.08. Subordination May Not Be Impaired
by Company . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 12.09. Rights of Trustee and Paying Agent . . . . . . . . . . . . . . . 90
SECTION 12.10. Distribution or Notice to
Representative . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 12.11. Article 12 Not To Prevent
Defaults Under a Subsidiary
Guaranty or Limit Right To
Demand Payment . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 12.12. Trustee Entitled To Rely . . . . . . . . . . . . . . . . . . . . 91
SECTION 12.13. Trustee To Effectuate Subordination . . . . . . . . . . . . . . 92
SECTION 12.14. Trustee Not Fiduciary for Holders
of Senior Indebtedness of Subsidiary Guarantor . . . . . . . . 92
SECTION 12.15. Reliance by Holders of Senior
Indebtedness on Subordination
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . 92
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ARTICLE 13
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . 92
SECTION 13.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 13.03. Communication by Holders with
Other Holders . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 13.04. Certificate and Opinion as to
Conditions Precedent . . . . . . . . . . . . . . . . . . . . . 94
SECTION 13.05. Statements Required in
Certificate or Opinion . . . . . . . . . . . . . . . . . . . . 94
SECTION 13.06. When Securities Disregarded . . . . . . . . . . . . . . . . . . 95
SECTION 13.07. Rules by Trustee, Paying Agent and
Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 13.08. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 13.09. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 13.10. No Recourse Against Others . . . . . . . . . . . . . . . . . . . 95
SECTION 13.11. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 13.12. Multiple Originals . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 13.13. Table of Contents; Headings . . . . . . . . . . . . . . . . . . 96
Appendix A Provisions Relating to Initial
Securities and Exchange Securities
Exhibit 1 to
Appendix A Form of Initial Security
Exhibit A Form of Exchange Security
Exhibit B Form of Supplemental Indenture
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- ---------
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.06
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02; 4.11; 13.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05; 13.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)
(last
sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.06
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.01
N.A. Means Not Applicable.
__________________________
Note: This Cross-Reference Table shall not, for any purposes, be deemed to be
part of this Indenture.
9
INDENTURE dated as of September 19, 1997,
between STONE ENERGY CORPORATION, a Delaware
corporation (the "Company"), and Texas Commerce Bank
National Association, as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's 8
3/4% Senior Subordinated Notes due 2007, to be issued, from time to time, in
one or more series as in this Indenture provided (the "Initial Securities")
and, if and when issued pursuant to a registered or private exchange for the
Initial Securities, the Company's 8 3/4% Senior Subordinated Notes due 2007
(the "Exchange Securities" and, together with the Initial Securities, the
"Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Additional Assets" means (i) any Property (other than cash,
Permitted Short-Term Investments or securities) used in the Oil and Gas
Business or any business ancillary thereto, (ii) Investments in any other
Person engaged in the Oil and Gas Business or any business ancillary thereto
(including the acquisition from third parties of Capital Stock of such Person)
as a result of which such other Person becomes a Restricted Subsidiary in
compliance with Section 4.15, (iii) the acquisition from third parties of
Capital Stock of a Restricted Subsidiary or (iv) Permitted Business
Investments.
"Adjusted Consolidated Net Tangible Assets" means (without
duplication), as of the date of determination, the remainder of:
(i) the sum of (a) discounted future net revenues from proved
oil and gas reserves of the Company and its Restricted Subsidiaries
calculated in accordance with Commission guidelines before any state,
federal or foreign income taxes, as estimated by the Company and
confirmed by a nationally recognized firm of independent petroleum
engineers in a reserve report prepared as of the end of the Company's
most recently completed fiscal year for which audited financial
10
2
statements are available, as increased by, as of the date of
determination, the estimated discounted future net revenues from (1)
estimated proved oil and gas reserves acquired since such year-end,
which reserves were not reflected in such year-end reserve report, and
(2) estimated oil and gas reserves attributable to upward revisions of
estimates of proved oil and gas reserves since such year-end due to
exploration, development or exploitation activities, in each case
calculated in accordance with Commission guidelines (utilizing the
prices utilized in such year-end reserve report), and decreased by, as
of the date of determination, the estimated discounted future net
revenues from (3) estimated proved oil and gas reserves produced or
disposed of since such year-end and (4) estimated oil and gas reserves
attributable to downward revisions of estimates of proved oil and gas
reserves since such year-end due to changes in geological conditions
or other factors which would, in accordance with standard industry
practice, cause such revisions, in each case calculated in accordance
with Commission guidelines (utilizing the prices utilized in such
year-end reserve report); provided that, in the case of each of the
determinations made pursuant to clauses (1) through (4), such
increases and decreases shall be as estimated by the Company's
petroleum engineers, unless there is a Material Change as a result of
such acquisitions, dispositions or revisions, in which event the
discounted future net revenues utilized for purposes of this clause
(i)(a) shall be confirmed in writing by a nationally recognized firm
of independent petroleum engineers, (b) the capitalized costs that are
attributable to oil and gas properties of the Company and its
Restricted Subsidiaries to which no proved oil and gas reserves are
attributable, based on the Company's books and records as of a date no
earlier than the date of the Company's latest annual or quarterly
financial statements, (c) the Net Working Capital on a date no earlier
than the date of the Company's latest annual or quarterly financial
statements and (d) the greater of (1) the net book value on a date no
earlier than the date of the Company's latest annual or quarterly
financial statements and (2) the appraised value, as estimated by
independent appraisers, of other tangible assets (including, without
duplication, Investments in unconsolidated Restricted Subsidiaries) of
the Company and its Restricted Subsidiaries, as of the date no earlier
than the date of the Company's latest audited financial statements,
minus
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3
(ii) the sum of (a) minority interests, (b) any net gas
balancing liabilities of the Company and its Restricted Subsidiaries
reflected in the Company's latest audited financial statements, (c) to
the extent included in (i)(a) above, the discounted future net
revenues, calculated in accordance with Commission guidelines
(utilizing the prices utilized in the Company's year-end reserve
report), attributable to reserves which are required to be delivered
to third parties to fully satisfy the obligations of the Company and
its Restricted Subsidiaries with respect to Volumetric Production
Payments (determined, if applicable, using the schedules specified
with respect thereto) and (d) the discounted future net revenues,
calculated in accordance with Commission guidelines, attributable to
reserves subject to Dollar-Denominated Production Payments which,
based on the estimates of production and price assumptions included in
determining the discounted future net revenues specified in (i)(a)
above, would be necessary to fully satisfy the payment obligations of
the Company and its Restricted Subsidiaries with respect to
Dollar-Denominated Production Payments (determined, if applicable,
using the schedules specified with respect thereto). If the Company
changes its method of accounting from the full cost method to the
successful efforts method or a similar method of accounting, "Adjusted
Consolidated Net Tangible Assets" shall continue to be calculated as
if the Company were still using the full cost method of accounting.
"Affiliate" of any specified Person means any other Person (i)
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person or (ii)
which beneficially owns or holds directly or indirectly 10% or more of any class
of the Voting Stock of such specified Person or of any Subsidiary of such
specified Person. For the purposes of this definition, "control," when used
with respect to any specified Person, means the power to direct the management
and policies of such Person directly or indirectly, whether through the
ownership of Voting Stock, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Asset Sale" means, with respect to any Person, any transfer,
conveyance, sale, lease or other disposition (collectively, "dispositions," and
including dispositions pursuant to any consolidation or merger) by such Person
or any of its Restricted Subsidiaries in any single transaction
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or series of transactions of (i) shares of Capital Stock or other ownership
interests of another Person (including Capital Stock of Restricted Subsidiaries
and Unrestricted Subsidiaries) or (ii) any other Property of such Person or any
of its Restricted Subsidiaries; provided, however, that the term "Asset Sale"
shall not include: (a) the disposition of Permitted Short-Term Investments,
inventory, accounts receivable, surplus or obsolete equipment or other Property
(excluding the disposition of oil and gas in place and other interests in real
property unless made in connection with a Permitted Business Investment) in the
ordinary course of business; (b) the abandonment, assignment, lease, sublease
or farmout of oil and gas properties, or the forfeiture or other disposition of
such properties pursuant to standard form operating agreements, in each case in
the ordinary course of business in a manner that is customary in the Oil and
Gas Business; (c) the disposition of Property received in settlement of debts
owing to the Company or any Restricted Subsidiary as a result of foreclosure,
perfection or enforcement of any Lien or debt, which debts were owing to the
Company or any Restricted Subsidiary in the ordinary course of business of the
Company or such Restricted Subsidiary; (d) any disposition that constitutes a
Restricted Payment made in compliance with Section 4.04; (e) when used with
respect to the Company, any disposition of all or substantially all of the
Property of the Company permitted pursuant to Article 5; (f) the disposition of
any Property by the Company or a Restricted Subsidiary to the Company or a
Wholly Owned Subsidiary; (g) the disposition of any asset with a Fair Market
Value of less than $2,000,000; or (h) any Production Payments and Reserve
Sales, provided that any such Production Payments and Reserve Sales other than
incentive compensation programs on terms that are reasonably customary in the
Oil and Gas Business for geologists, geophysicists and other providers of
technical services to the Company or a Restricted Subsidiary, shall have been
created, Incurred, issued, assumed or Guaranteed in connection with the
financing of, and within 60 days after the acquisition of, the Property that is
subject thereto.
"Average Life" means, with respect to any Indebtedness, at any
date of determination, the quotient obtained by dividing (i) the sum of the
products of (a) the number of years (and any portion thereof) from the date of
determination to the date or dates of each successive scheduled principal
payment (including any sinking fund or mandatory redemption payment
requirements) of such Indebtedness multiplied by (b) the amount of each such
principal payment by (ii) the sum of all such principal payments.
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"Bank Credit Facilities" means, with respect to any Person,
one or more debt facilities or commercial paper facilities with banks or other
institutional lenders (including pursuant to the Third Amended and Restated
Credit Agreement, dated as of July 31, 1997, among the Company, NationsBank of
Texas, N.A., as agent, and the lenders referred to therein and the Term Loan
Agreement dated as of November 30, 1995, between the Company and First National
Bank of Commerce) providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables) or trade letters of credit.
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such
Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means any obligation which is
required to be classified and accounted for as a capital lease obligation in
accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP, and the Stated Maturity thereof shall be the date of the
last payment date of rent or any other amount due in respect of such
obligation.
"Capital Stock" in any Person means any and all shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person and any rights (other than debt securities
convertible into an equity interest), warrants or options to subscribe for or
to acquire an equity interest in such Person; provided, however, that "Capital
Stock" shall not include Redeemable Stock.
"Change of Control" means the occurrence of any of the
following events:
(i) any "person" or "group" (within the meaning of Sections
13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision
to either of the foregoing, including any group acting for the purpose
of acquiring, holding or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act), other than one or more
Permitted Holders, becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person
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shall be deemed to have "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) of 50
percent or more of the total voting power of all classes of the Voting
Stock of the Company or currently exercisable warrants or options to
acquire such Voting Stock;
(ii) the sale, lease, conveyance or transfer of all or
substantially all the assets of the Company and the Restricted
Subsidiaries taken as a whole (other than to any Wholly Owned
Subsidiary) shall have occurred;
(iii) the shareholders of the Company shall have approved any
plan of liquidation or dissolution of the Company;
(iv) the Company consolidates with or merges into another
Person (other than one or more Permitted Holders) or any Person (other
than one or more Permitted Holders) consolidates with or merges into
the Company in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is reclassified into or
exchanged for cash, securities or other property, other than any such
transaction where (a) the outstanding Voting Stock of the Company is
reclassified into or exchanged for Voting Stock of the surviving
corporation that is Capital Stock and (b) either (x) the holders of
the Voting Stock of the Company immediately prior to such transaction
own, directly or indirectly, not less than a majority of the Voting
Stock of the surviving corporation immediately after such transaction
in substantially the same proportion as before the transaction or (y)
within 25 days after the closing of any such transaction both Moody's
and S&P shall have expressly affirmed credit ratings for the
Securities (after giving effect to such transaction) that are as high
or higher than the highest such ratings for the Securities given by
such services, respectively, at any time during the 90 days
immediately prior to the public announcement of such transaction and
such expressly affirmed ratings are at least "Ba3" from Moody's and
"BB" from S&P; or
(v) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
(together with any new directors whose election or appointment by such
Board or whose nomination for election by the shareholders of the
Company was approved by a vote of a
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majority of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in
office.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture
until a successor replaces it pursuant to the applicable provisions hereof and,
thereafter, means the successor and, for purposes of any provision contained
herein and required by the TIA, each other obligor on the indenture securities.
"Consolidated Interest Coverage Ratio" means, as of the date
of the transaction giving rise to the need to calculate the Consolidated
Interest Coverage Ratio (the "Transaction Date"), the ratio of (i) the
aggregate amount of EBITDA of the Company and its consolidated Restricted
Subsidiaries for the four full fiscal quarters immediately prior to the
Transaction Date for which financial statements are available to (ii) the
aggregate Consolidated Interest Expense of the Company and its Restricted
Subsidiaries that is anticipated to accrue during a period consisting of the
fiscal quarter in which the Transaction Date occurs and the three fiscal
quarters immediately subsequent thereto (based upon the pro forma amount and
maturity of, and interest payments in respect of, Indebtedness of the Company
and its Restricted Subsidiaries expected by the Company to be outstanding on
the Transaction Date), assuming for the purposes of this measurement the
continuation of market interest rates prevailing on the Transaction Date and
base interest rates in respect of floating interest rate obligations equal to
the base interest rates on such obligations in effect as of the Transaction
Date; provided that if the Company or any of its Restricted Subsidiaries is a
party to any Interest Rate Protection Agreement which would have the effect of
changing the interest rate on any Indebtedness of the Company or any of its
Restricted Subsidiaries for such four quarter period (or a portion thereof),
the resulting rate shall be used for such four quarter period or portion
thereof; provided further that any Consolidated Interest Expense with respect
to Indebtedness Incurred or retired by the Company or any of its Restricted
Subsidiaries during the fiscal quarter in which the Transaction Date occurs
shall be calculated as if such Indebtedness was so Incurred or retired on the
first day of the fiscal quarter in which the Transaction Date occurs. In
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8
addition, if since the beginning of the four full fiscal quarter period
preceding the Transaction Date, (a) the Company or any of its Restricted
Subsidiaries shall have engaged in any Asset Sale, EBITDA for such period shall
be reduced by an amount equal to the EBITDA (if positive), or increased by an
amount equal to the EBITDA (if negative), directly attributable to the assets
which are the subject of such Asset Sale for such period calculated on a pro
forma basis as if such Asset Sale and any related retirement of Indebtedness
had occurred on the first day of such period or (b) the Company or any of its
Restricted Subsidiaries shall have acquired any material assets, EBITDA shall
be calculated on a pro forma basis as if such asset acquisitions had occurred
on the first day of such four fiscal quarter period.
"Consolidated Interest Expense" means, with respect to any
Person for any period, without duplication, (i) the sum of (a) the aggregate
amount of cash and noncash interest expense (including capitalized interest) of
such Person and its Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP in respect of Indebtedness
(including (1) any amortization of debt discount, (2) net costs associated with
Interest Rate Protection Agreements (including any amortization of discounts),
(3) the interest portion of any deferred payment obligation, (4) all accrued
interest and (5) all commissions, discounts, commitment fees, origination fees
and other fees and charges owed with respect to the Bank Credit Facilities and
other Indebtedness) paid, accrued or scheduled to be paid or accrued during
such period; (b) Redeemable Stock dividends of such Person (and of its
Restricted Subsidiaries if paid to a Person other than such Person or its
Restricted Subsidiaries) and Preferred Stock dividends of such Person's
Restricted Subsidiaries if paid to a Person other than such Person or its other
Restricted Subsidiaries; (c) the portion of any rental obligation of such
Person or its Restricted Subsidiaries in respect of any Capital Lease
Obligation allocable to interest expense in accordance with GAAP; (d) the
portion of any rental obligation of such Person or its Restricted Subsidiaries
in respect of any Sale and Leaseback Transaction that is Indebtedness allocable
to interest expense (determined as if such obligation were treated as a Capital
Lease Obligation); and (e) to the extent any Indebtedness of any other Person
(other than Restricted Subsidiaries) is Guaranteed by such Person or any of its
Restricted Subsidiaries, the aggregate amount of interest paid, accrued or
scheduled to be paid or accrued by such other Person during such period
attributable to any such Indebtedness; less (ii) to the extent included in (i)
above, amortization or write-off of deferred
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financing costs of such Person and its Restricted Subsidiaries during such
period; in the case of both (i) and (ii) above, after elimination of
intercompany accounts among such Person and its Restricted Subsidiaries and as
determined in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period,
the aggregate net income (or net loss, as the case may be) of such Person and
its Restricted Subsidiaries for such period on a consolidated basis, determined
in accordance with GAAP; provided that there shall be excluded therefrom,
without duplication: (i) items classified as extraordinary gains or losses net
of tax (less all fees and expenses relating thereto); (ii) any gain or loss net
of taxes (less all fees and expenses relating thereto) realized on the sale or
other disposition of Property, including the Capital Stock of any other Person
(but in no event shall this clause (ii) apply to any gains or losses on the
sale in the ordinary course of business of oil, gas or other hydrocarbons
produced or manufactured); (iii) the net income of any Restricted Subsidiary of
such specified Person to the extent the transfer to that Person of that income
is restricted by contract or otherwise, except for any cash dividends or cash
distributions actually paid by such Restricted Subsidiary to such Person during
such period; (iv) the net income (or loss) of any other Person in which such
specified Person or any of its Restricted Subsidiaries has an interest (which
interest does not cause the net income of such other Person to be consolidated
with the net income of such specified Person in accordance with GAAP or is an
interest in a consolidated Unrestricted Subsidiary), except to the extent of
the amount of cash dividends or other cash distributions actually paid to such
Person or its consolidated Restricted Subsidiaries by such other Person during
such period; (v) for the purposes of Section 4.04 only, the net income of any
Person acquired by such specified Person or any of its Restricted Subsidiaries
in a pooling-of-interests transaction for any period prior to the date of such
acquisition; (vi) any gain or loss, net of taxes, realized on the termination
of any employee pension benefit plan; (vii) any adjustments of a deferred tax
liability or asset pursuant to Statement of Financial Accounting Standards No.
109 which result from changes in enacted tax laws or rates; (viii) the
cumulative effect of a change in accounting principles; (ix) any write-downs
of noncurrent assets, provided that any ceiling limitation write-downs under
Commission guidelines shall be treated as capitalized costs, as if such
write-downs had not occurred; and (x) any noncash compensation expense realized
for grants of performance shares, stock options or stock awards to
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officers, directors and employees of the Company or any of its Restricted
Subsidiaries.
"Consolidated Net Worth" of any Person means the stockholders'
equity of such Person and its Restricted Subsidiaries, as determined on a
consolidated basis in accordance with GAAP, less (to the extent included in
stockholders' equity) amounts attributable to Redeemable Stock of such Person
or its Restricted Subsidiaries.
"Default" means any event, act or condition the occurrence of
which is, or after notice or the passage of time or both would be, an Event of
Default.
"Designated Senior Indebtedness" means (i) the Bank Credit
Facilities and (ii) any other Senior Indebtedness of the Company which has, at
the time of determination, an aggregate principal amount outstanding of at
least $10,000,000 that is specifically designated in the instrument evidencing
such Senior Indebtedness and is designated in a notice delivered by the Company
to the holders or a Representative of the holders of such Senior Indebtedness
and the Trustee as "Designated Senior Indebtedness" of the Company.
"Dollar-Denominated Production Payments" means production
payment obligations recorded as liabilities in accordance with GAAP, together
with all undertakings and obligations in connection therewith.
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period, plus (i) the sum of, to
the extent reflected in the consolidated income statement of such Person and
its Restricted Subsidiaries for such period from which Consolidated Net Income
is determined and deducted in the determination of such Consolidated Net
Income, without duplication: (a) income tax expense (but excluding income tax
expense relating to sales or other dispositions of Property, including the
Capital Stock of any other Person, the gains from which are excluded in the
determination of such Consolidated Net Income), (b) Consolidated Interest
Expense, (c) depreciation and depletion expense, (d) amortization expense, (e)
exploration expense (if applicable to the Company after the Issue Date) and (f)
any other noncash charges including unrealized foreign exchange (excluding,
however, any such other noncash charge which requires an accrual of or reserve
for cash charges for any future period) less (ii) the sum of, to the extent
reflected in the consolidated income statement of such Person and its
Restricted Subsidiaries for such period from which
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Consolidated Net Income is determined and added in the determination of such
Consolidated Net Income, without duplication (a) income tax recovery (excluding,
however, income tax recovery relating to sales or other dispositions of
Property, including the Capital Stock of any other Person, the losses from which
are excluded in the determination of such Consolidated Net Income) and (b)
unrealized foreign exchange gains.
"Equity Offering" means a bona fide underwritten sale to the
public of common stock of the Company pursuant to a registration statement
(other than a Form S-8 or any other form relating to securities issuable under
any employee benefit plan of the Company) that is declared effective by the
Commission following the Issue Date.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchanged Properties" means properties or assets used or
useful in the Oil and Gas Business received by the Company or a Restricted
Subsidiary in trade or as a portion of the total consideration for other such
properties or assets.
"Exchange Rate Contract" means, with respect to any Person,
any currency swap agreements, forward exchange rate agreements, foreign
currency futures or options, exchange rate collar agreements, exchange rate
insurance and other agreements or arrangements, or any combination thereof,
entered into by such Person in the ordinary course of its business for the
purpose of limiting or managing exchange rate risks to which such Person is
subject.
"Fair Market Value" means, with respect to any assets to be
transferred pursuant to any Asset Sale or Sale and Leaseback Transaction or any
noncash consideration or property transferred or received by any Person, the
fair market value of such consideration or other property as determined by (i)
any officer of the Company if such fair market value is less than $5,000,000
and (ii) the Board of Directors as evidenced by a certified resolution
delivered to the Trustee if such fair market value is equal to or in excess of
$5,000,000.
"GAAP" means United States generally accepted accounting
principles as in effect on the date of this Indenture, unless stated otherwise.
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"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, and including any Lien on the
assets of such Person securing obligations to pay Indebtedness of the primary
obligor and any obligation of such Person (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or to purchase
(or to advance or supply funds for the purchase or payment of) any security for
the payment of such Indebtedness, (ii) to purchase Property, securities or
services for the purpose of assuring the holder of such Indebtedness of the
payment of such Indebtedness or (iii) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness (and
"Guaranteed", "Guaranteeing" and "Guarantor" shall have meanings correlative to
the foregoing); provided, however, that a Guarantee by any Person shall not
include (a) endorsements by such Person for collection or deposit, in either
case, in the ordinary course of business or (b) a contractual commitment by one
Person to invest in another Person for so long as such Investment is reasonably
expected to constitute a Permitted Investment under clause (ii) of the
definition of Permitted Investments.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Security Register.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume, Guarantee or become liable in respect of such Indebtedness
or other obligation or the recording, as required pursuant to GAAP or
otherwise, of any such Indebtedness or obligation on the balance sheet of such
Person (and "Incurrence", "Incurred", "Incurrable" and "Incurring" shall have
meanings correlative to the foregoing); provided, however, that a change in
GAAP that results in an obligation of such Person that exists at such time, and
is not theretofore classified as Indebtedness, becoming Indebtedness shall not
be deemed an Incurrence of such Indebtedness. For purposes of this definition,
Indebtedness of the Company or a Restricted Subsidiary held by a Wholly Owned
Subsidiary shall be deemed to be Incurred by the Company or such Restricted
Subsidiary in the event such Wholly Owned Subsidiary ceases to be a Wholly
Owned Subsidiary or in the event such Indebtedness is transferred to a Person
other than the Company or a Wholly Owned Subsidiary. For purposes of this
definition, any non-interest bearing or other discount Indebtedness shall be
deemed to have been Incurred (in an amount equal to its
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aggregate principal amount at its Stated Maturity) only on the date of original
issue thereof.
"Indebtedness" means at any time (without duplication), with
respect to any Person, whether recourse is to all or a portion of the assets of
such Person, and whether or not contingent, (i) any obligation of such Person
for borrowed money, (ii) any obligation of such Person evidenced by bonds,
debentures, notes, Guarantees or other similar instruments, including any such
obligations Incurred in connection with the acquisition of Property, assets or
businesses, (iii) any reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person, (iv) any obligation of such Person issued or assumed as
the deferred purchase price of Property or services (other than Trade Accounts
Payable), (v) any Capital Lease Obligation of such Person, (vi) the maximum
fixed redemption or repurchase price of Redeemable Stock of such Person at the
time of determination, (vii) any payment obligation of such Person under
Exchange Rate Contracts, Interest Rate Protection Agreements, Oil and Gas
Hedging Contracts or under any similar agreements or instruments, (viii) any
obligation to pay rent or other payment amounts of such Person with respect to
any Sale and Leaseback Transaction to which such Person is a party and (ix) any
obligation of the type referred to in clauses (i) through (viii) of this
paragraph of another Person and all dividends of another Person the payment of
which, in either case, such Person has Guaranteed or is responsible or liable,
directly or indirectly, as obligor, Guarantor or otherwise; provided, however,
that Indebtedness shall not include Production Payments and Reserve Sales. For
purposes of this definition, the maximum fixed repurchase price of any
Redeemable Stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Stock as if such
Redeemable Stock were repurchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture; provided, however, that
if such Redeemable Stock is not then permitted to be repurchased, the
repurchase price shall be the book value of such Redeemable Stock. The amount
of Indebtedness of any Person at any date shall be the outstanding balance at
such date of all unconditional obligations as described above and the maximum
liability at such date in respect of any contingent obligations described
above.
"Indenture" means this Indenture as amended or supplemented
from time to time.
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"Interest Rate Protection Agreement" means, with respect to
any Person, any interest rate swap agreement, forward rate agreement, interest
rate cap or collar agreement or other financial agreement or arrangement
entered into by such Person in the ordinary course of its business for the
purpose of limiting or managing interest rate risks to which such Person is
subject.
"Investment" means, with respect to any Person (i) any amount
paid by such Person, directly or indirectly, to any other Person for Capital
Stock or other Property of, or as a capital contribution to, any other Person
or (ii) any direct or indirect loan or advance to any other Person (other than
accounts receivable of such Person arising in the ordinary course of business);
provided, however, that Investments shall not include (a) in the case of clause
(i) as used in the definition of "Restricted Payments" only, any such amount
paid through the issuance of Capital Stock of the Company and (b) in the case
of clause (i) or (ii), extensions of trade credit on commercially reasonable
terms in accordance with normal trade practices and any increase in the equity
ownership in any Person resulting from retained earnings of such Person.
"Issue Date" means the date on which the Original Securities
first were issued under this Indenture.
"Lien" means, with respect to any Property, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien (statutory or other), charge, easement, encumbrance, preference,
priority or other security or similar agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such Property (including
any conditional sale or other title retention agreement having substantially
the same economic effect as any of the foregoing). For purposes of Section
4.10, a Capital Lease Obligation shall be deemed to be secured by a Lien on the
property being leased.
"Liquid Securities" means securities (i) of an issuer that is
not an Affiliate of the Company, (ii) that are publicly traded on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market and
(iii) as to which the Company is not subject to any restrictions on sale or
transfer (including any volume restrictions under Rule 144 under the Securities
Act or any other restrictions imposed by the Securities Act) or as to which a
registration statement under the Securities Act covering the resale thereof is
in effect for as long as the securities are held; provided that securities
meeting the
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requirements of clauses (i), (ii) and (iii) above shall be treated as Liquid
Securities from the date of receipt thereof until and only until the earlier of
(x) the date on which such securities are sold or exchanged for cash or
Permitted Short-Term Investments and (y) 150 days following the date of receipt
of such securities. If such securities are not sold or exchanged for cash or
Permitted Short-Term Investments within 120 days of receipt thereof, for
purposes of determining whether the transaction pursuant to which the Company
or a Restricted Subsidiary received the securities was in compliance with
Section 4.06, such securities shall be deemed not to have been Liquid
Securities at any time.
"Material Change" means an increase or decrease (except to the
extent resulting from changes in prices) of more than 30% during a fiscal
quarter in the estimated discounted future net revenues from proved oil and gas
reserves of the Company and its Restricted Subsidiaries, calculated in
accordance with clause (i)(a) of the definition of Adjusted Consolidated Net
Tangible Assets; provided, however, that the following shall be excluded from
the calculation of Material Change: (i) any acquisitions during the quarter of
oil and gas reserves with respect to which the Company's estimate of the
discounted future net revenues from proved oil and gas reserves has been
confirmed by independent petroleum engineers; and (ii) any dispositions of
Properties during such quarter that were disposed of in compliance with Section
4.06.
"Moody's" means Xxxxx'x Investors Service, Inc. and its
successors.
"Net Available Cash" from an Asset Sale means cash proceeds
received therefrom (including (i) any cash proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, and (ii) the Fair Market Value of Liquid
Securities and Permitted Short-Term Investments, and excluding (a) any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to the Property that is the subject
of such Asset Sale and (b) except to the extent subsequently converted to cash,
Liquid Securities or Permitted Short-Term Investments within 240 days after
such Asset Sale, consideration constituting Exchanged Properties or
consideration other than as identified in the immediately preceding clauses (i)
and (ii)), in each case net of (a) all legal, title and recording expenses,
commissions and other fees and expenses incurred, and all federal, state,
foreign and local taxes required to be paid or accrued as a liability under
GAAP as a consequence of such Asset Sale,
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(b) all payments made on any Indebtedness (but specifically excluding
Indebtedness of the Company and its Restricted Subsidiaries assumed in
connection with or in anticipation of such Asset Sale) which is secured by any
assets subject to such Asset Sale, in accordance with the terms of any Lien upon
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Sale or by applicable law, be repaid out of the proceeds
from such Asset Sale, provided that such payments are made in a manner that
results in the permanent reduction in the balance of such Indebtedness and, if
applicable, a permanent reduction in any outstanding commitment for future
incurrences of Indebtedness thereunder, (c) all distributions and other payments
required to be made to minority interest holders in Subsidiaries or joint
ventures as a result of such Asset Sale and (d) the deduction of appropriate
amounts to be provided by the seller as a reserve, in accordance with GAAP,
against any liabilities associated with the assets disposed of in such Asset
Sale and retained by the Company or any Restricted Subsidiary after such Asset
Sale; provided, however, that if any consideration for an Asset Sale (which
would otherwise constitute Net Available Cash) is required to be held in escrow
pending determination of whether a purchase price adjustment shall be made, such
consideration (or any portion thereof) shall become Net Available Cash only at
such time as it is released to such Person or its Restricted Subsidiaries from
escrow.
"Net Working Capital" means (i) all current assets of the
Company and its Restricted Subsidiaries, less (ii) all current liabilities of
the Company and its Restricted Subsidiaries, except current liabilities included
in Indebtedness, in each case as set forth in consolidated financial statements
of the Company prepared in accordance with GAAP.
"Non-recourse Purchase Money Indebtedness" means Indebtedness
(other than Capital Lease Obligations) of the Company or any Subsidiary
Guarantor incurred in connection with the acquisition by the Company or such
Subsidiary Guarantor in the ordinary course of business of fixed assets used in
the Oil and Gas Business (including office buildings and other real property
used by the Company or such Subsidiary Guarantor in conducting its operations)
with respect to which (i) the holders of such Indebtedness agree that they shall
look solely to the fixed assets so acquired which secure such Indebtedness, and
neither the Company nor any Restricted Subsidiary (a) is directly or indirectly
liable for such Indebtedness or (b) provides credit support, including any
undertaking, Guarantee, agreement or instrument that would constitute
Indebtedness (other than
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the grant of a Lien on such acquired fixed assets), and (ii) no default or event
of default with respect to such Indebtedness would cause, or permit (after
notice or passage of time or otherwise), any holder of any other Indebtedness of
the Company or a Subsidiary Guarantor to declare a default or event of default
on such other Indebtedness or cause the payment, repurchase, redemption,
defeasance or other acquisition or retirement for value thereof to be
accelerated or payable prior to any scheduled principal payment, scheduled
sinking fund payment or maturity.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers at least one of whom shall be the principal executive officer,
principal accounting officer or principal financial officer of the Company.
"Oil and Gas Business" means the business of exploiting,
exploring for, developing, acquiring, operating, producing, processing,
gathering, marketing, storing, selling, hedging, treating, swapping, refining
and transporting hydrocarbons and other related energy businesses.
"Oil and Gas Hedging Contract" means, with respect to any
Person, any agreement or arrangement, or any combination thereof, relating to
oil and gas or other hydrocarbon prices, transportation or basis costs or
differentials or other similar financial factors, that is customary in the Oil
and Gas Business and is entered into by such Person in the ordinary course of
its business for the purpose of limiting or managing risks associated with
fluctuations in such prices, costs, differentials or similar factors.
"Oil and Gas Liens" means (i) Liens on any specific property
or any interest therein, construction thereon or improvement thereto to secure
all or any part of the costs incurred for surveying, exploration, drilling,
extraction, development, operation, production, construction, alteration, repair
or improvement of, in, under or on such property and the plugging and
abandonment of xxxxx located thereon (it being understood that, in the case of
oil and gas producing properties, or any interest therein, costs incurred for
"development" shall include costs incurred for all facilities relating to such
properties or to projects, ventures or other arrangements of
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18
which such properties form a part or which relate to such properties or
interests); (ii) Liens on an oil or gas producing property to secure obligations
incurred or guarantees of obligations incurred in connection with or necessarily
incidental to commitments for the purchase or sale of, or the transportation or
distribution of, the products derived from such property; (iii) Liens arising
under partnership agreements, oil and gas leases, overriding royalty agreements,
net profits agreements, production payment agreements, royalty trust agreements,
incentive compensation programs for geologists, geophysicists and other
providers of technical services to the Company or a Restricted Subsidiary,
master limited partnership agreements, farmout agreements, farmin agreements,
division orders, contracts for the sale, purchase, exchange, transportation,
gathering or processing of oil, gas or other hydrocarbons, unitizations and
pooling designations, declarations, orders and agreements, development
agreements, operating agreements, production sales contracts, area of mutual
interest agreements, gas balancing or deferred production agreements, injection,
repressuring and recycling agreements, salt water or other disposal agreements,
seismic or geophysical permits or agreements, and other agreements which are
customary in the Oil and Gas Business; provided, however, in all instances that
such Liens are limited to the assets that are the subject of the relevant
agreement, program, order or contract; (iv) Liens arising in connection with
Production Payments and Reserve Sales; and (v) Liens on pipelines or pipeline
facilities that arise by operation of law.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Pari Passu Indebtedness" means any Indebtedness of the
Company (or a Subsidiary Guarantor) that is pari passu in right of payment to
the Securities (or a Subsidiary Guaranty, as appropriate).
"Pari Passu Offer" means an offer by the Company or a
Subsidiary Guarantor to purchase all or a portion of Pari Passu Indebtedness to
the extent required by the indenture or other agreement or instrument pursuant
to which such Pari Passu Indebtedness was issued.
"Permitted Business Investments" means Investments and
expenditures made in the ordinary course of, and of a nature that is or shall
have become customary in, the Oil and Gas Business as a means of actively
engaging therein
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through agreements, transactions, interests or arrangements which permit one to
share risks or costs, comply with regulatory requirements regarding local
ownership or satisfy other objectives customarily achieved through the conduct
of Oil and Gas Business jointly with third parties, including (i) ownership
interests in oil and gas properties or gathering, transportation, processing,
storage or related systems and (ii) Investments and expenditures in the form of
or pursuant to operating agreements, processing agreements, farmin agreements,
farmout agreements, development agreements, area of mutual interest agreements,
unitization agreements, pooling arrangements, joint bidding agreements, service
contracts, joint venture agreements, partnership agreements (whether general or
limited) and other similar agreements (including for limited liability
companies) with third parties, excluding, however, Investments in corporations
other than Restricted Subsidiaries.
"Permitted Hedging Agreements" means (i) Exchange Rate
Contracts and Oil and Gas Hedging Contracts and (ii) Interest Rate Protection
Agreements but only to the extent that the stated aggregate notional amount
thereunder does not exceed 100% of the aggregate principal amount of the
Indebtedness of the Company or a Restricted Subsidiary covered by such Interest
Rate Protection Agreements at the time such agreements were entered into.
"Permitted Holders" means Xxxxx X. Xxxxx, D. Xxxxx Xxxxx,
Xxxxxxx X. Xxxxx and Xxx X. Xxxxxx, and their respective estates, spouses,
ancestors, and lineal descendants, the legal representatives of any of the
foregoing and the trustees of any bona fide trusts of which the foregoing are
the sole beneficiaries or the grantors, or any Person of which the foregoing
"beneficially owns" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act) voting securities representing at least 66-2/3% of the total voting power
of all classes of Voting Stock of such Person (exclusive of any matters as to
which class voting rights exist).
"Permitted Indebtedness" means any and all of the following:
(i) Indebtedness arising under this Indenture with respect to the Original
Securities and any Subsidiary Guaranties relating thereto; (ii) Indebtedness
under the Bank Credit Facilities, provided that the aggregate principal amount
of all Indebtedness under the Bank Credit Facilities, together with all
Indebtedness Incurred pursuant to clause (x) of this paragraph in respect of
Indebtedness previously Incurred pursuant to this clause (ii), at any one time
outstanding does not exceed the greater of (a) $100,000,000, which amount shall
be permanently reduced by
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the amount of Net Available Cash from Asset Sales used to permanently repay
Indebtedness under the Bank Credit Facilities and not subsequently reinvested in
Additional Assets or used to permanently reduce other Indebtedness to the extent
permitted pursuant to Section 4.06, and (b) an amount equal to the sum of (1)
$25,000,000 and (2) 20.0% of Adjusted Consolidated Net Tangible Assets
determined as of the date of the Incurrence of such Indebtedness; (iii)
Indebtedness to the Company or any Wholly Owned Subsidiary by any of its
Restricted Subsidiaries or Indebtedness of the Company to any of its Wholly
Owned Subsidiaries (but only so long as such Indebtedness is held by the Company
or a Wholly Owned Subsidiary); (iv) Indebtedness in respect of bid, performance,
reimbursement or surety obligations issued by or for the account of the Company
or any Restricted Subsidiary in the ordinary course of business, including
guaranties and letters of credit functioning as or supporting such bid,
performance, reimbursement or surety obligations (in each case other than for an
obligation for money borrowed); (v) Indebtedness under Permitted Hedging
Agreements; (vi) in-kind obligations relating to oil or gas balancing positions
arising in the ordinary course of business; (vii) Indebtedness outstanding on
the Issue Date not otherwise permitted in clauses (i) through (vi) above; (viii)
Non-recourse Purchase Money Indebtedness; (ix) Indebtedness not otherwise
permitted to be Incurred pursuant to this paragraph (excluding any Indebtedness
Incurred pursuant to clause (a) of Section 4.03), provided that the aggregate
principal amount of all Indebtedness Incurred pursuant to this clause (ix),
together with all Indebtedness Incurred pursuant to clause (x) of this paragraph
in respect of Indebtedness previously Incurred pursuant to this clause (ix), at
any one time outstanding does not exceed $30,000,000; (x) Indebtedness Incurred
in exchange for, or the proceeds of which are used to refinance, (a)
Indebtedness referred to in clauses (i), (ii), (vii), (viii) and (ix) of this
paragraph (including Indebtedness previously Incurred pursuant to this clause
(x)) and (b) Indebtedness Incurred pursuant to clause (a) of Section 4.03,
provided that, in the case of each of the foregoing clauses (a) and (b), such
Indebtedness is Permitted Refinancing Indebtedness; and (xi) Indebtedness
consisting of obligations in respect of purchase price adjustments, indemnities
or Guarantees of the same or similar matters in connection with the acquisition
or disposition of Property.
"Permitted Investments" means any and all of the following:
(i) Permitted Short-Term Investments; (ii) Investments in property, plant and
equipment used in the
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ordinary course of business and Permitted Business Investments; (iii)
Investments by any Restricted Subsidiary in the Company; (iv) Investments by the
Company or any Restricted Subsidiary in any Restricted Subsidiary; (v)
Investments by the Company or any Restricted Subsidiary in (a) any Person that
shall, upon the making of such Investment, become a Restricted Subsidiary or (b)
any Person if as a result of such Investment such Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
Property to, the Company or a Restricted Subsidiary; (vi) Investments in the
form of securities received from Asset Sales, provided that such Asset Sales are
made in compliance with Section 4.06; (vii) Investments in negotiable
instruments held for collection; lease, utility and other similar deposits; and
stock, obligations or other securities received in settlement of debts
(including under any bankruptcy or other similar proceeding) owing to the
Company or any of its Restricted Subsidiaries as a result of foreclosure,
perfection or enforcement of any Liens or Indebtedness, in each of the foregoing
cases in the ordinary course of business of the Company or such Restricted
Subsidiary; (viii) relocation allowances for, and advances and loans to,
officers, directors and employees of the Company or any of its Restricted
Subsidiaries made in the ordinary course of business; provided such items do not
exceed in the aggregate $2,000,000 at any one time outstanding; (ix) Investments
intended to promote the Company's strategic objectives in the Oil and Gas
Business in an amount not to exceed 5% of Adjusted Consolidated Net Tangible
Assets (determined as of the date of the making of any such Investment) at any
one time outstanding (which Investments shall be deemed to be no longer
outstanding only upon the return of capital thereof); (x) Investments made
pursuant to Permitted Hedging Agreements of the Company and its Restricted
Subsidiaries; and (xi) Investments pursuant to any agreement or obligation of
the Company or any of its Restricted Subsidiaries as in effect on the Issue Date
(other than Investments described in clauses (i) through (x) above).
"Permitted Liens" means any and all of the following: (i)
Liens existing as of the Issue Date; (ii) Liens securing the Securities, any
Subsidiary Guaranties and other obligations arising under this Indenture; (iii)
any Lien existing on any Property of a Person at the time such Person is merged
or consolidated with or into the Company or a Restricted Subsidiary or becomes a
Restricted Subsidiary (and not incurred in anticipation of or in connection with
such transaction), provided that such Liens are not extended to other Property
of the Company or the Restricted Subsidiaries; (iv) any Lien existing on any
Property at the
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time of the acquisition thereof (and not incurred in anticipation of or in
connection with such transaction), provided that such Liens are not extended to
other Property of the Company or the Restricted Subsidiaries; (v) any Lien
incurred in the ordinary course of business incidental to the conduct of the
business of the Company or the Restricted Subsidiaries or the ownership of their
Property (including (a) easements, rights of way and similar encumbrances, (b)
rights or title of lessors under leases (other than Capital Lease Obligations),
(c) rights of collecting banks having rights of setoff, revocation, refund or
chargeback with respect to money or instruments of the Company or the Restricted
Subsidiaries on deposit with or in the possession of such banks, (d) Liens
imposed by law, including Liens under workers' compensation or similar
legislation and mechanics', carriers', warehousemen's, materialmen's, suppliers'
and vendors' Liens, (e) Liens incurred to secure performance of obligations with
respect to statutory or regulatory requirements, performance or return-of-money
bonds, surety bonds or other obligations of a like nature and incurred in a
manner consistent with industry practice and (f) Oil and Gas Liens), in each
case which are not incurred in connection with the borrowing of money, the
obtaining of advances or credit or the payment of the deferred purchase price of
Property (other than Trade Accounts Payable); (vi) Liens for taxes, assessments
and governmental charges not yet due or the validity of which are being
contested in good faith by appropriate proceedings, promptly instituted and
diligently conducted, and for which adequate reserves have been established to
the extent required by GAAP as in effect at such time; (vii) Liens incurred to
secure appeal bonds and judgment and attachment Liens, in each case in
connection with litigation or legal proceedings that are being contested in good
faith by appropriate proceedings so long as reserves have been established to
the extent required by GAAP as in effect at such time and so long as such Liens
do not encumber assets by an aggregate amount (together with the amount of any
unstayed judgments against the Company or any Restricted Subsidiary but
excluding any such Liens to the extent securing insured or indemnified judgments
or orders) in excess of $20,000,000; (viii) Liens securing Permitted Hedging
Agreements of the Company and its Restricted Subsidiaries; (ix) Liens securing
Purchase Money Indebtedness or Capital Lease Obligations, provided that such
Liens attach only to the Property acquired with the proceeds of such Purchase
Money Indebtedness or Capital Lease Obligations; (x) Liens securing Non-recourse
Purchase Money Indebtedness granted in connection with the acquisition by the
Company or any Subsidiary Guarantor in the ordinary course of business of fixed
assets used in the
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Oil and Gas Business (including office buildings and other real property used by
the Company or such Subsidiary Guarantor in conducting its operations), provided
that (a) such Liens attach only to the fixed assets acquired with the proceeds
of such Non-recourse Purchase Money Indebtedness and (b) such Non-recourse
Purchase Money Indebtedness is not in excess of the purchase price of such fixed
assets; (xi) Liens resulting from the deposit of funds or evidences of
Indebtedness in trust for the purpose of decreasing or legally defeasing
Indebtedness of the Company or any of its Subsidiaries so long as such deposit
of funds is permitted by Section 4.04; (xii) Liens resulting from a pledge of
Capital Stock of a Person that is not a Restricted Subsidiary to secure
obligations of such Person and any refinancings thereof; (xiii) Liens to secure
any permitted extension, renewal, refinancing, refunding or exchange (or
successive extensions, renewals, refinancings, refundings or exchanges), in
whole or in part, of or for any Indebtedness secured by Liens referred to in
clauses (i), (ii), (iii), (iv), (ix) and (x) above; provided, however, that (a)
such new Lien shall be limited to all or part of the same Property (including
future improvements thereon and accessions thereto) subject to the original Lien
and (b) the Indebtedness secured by such Lien at such time is not increased to
any amount greater than the sum of (1) the outstanding principal amount or, if
greater, the committed amount of the Indebtedness secured by such original Lien
immediately prior to such extension, renewal, refinancing, refunding or exchange
and (2) an amount necessary to pay any fees and expenses, including premiums,
related to such refinancing, refunding, extension, renewal or replacement; (xiv)
Liens in favor of the Company or a Restricted Subsidiary; and (xv) Liens not
otherwise permitted by clauses (i) through (xiv) above incurred in the ordinary
course of business of the Company and its Restricted Subsidiaries and
encumbering Property having an aggregate Fair Market Value not in excess of
$5,000,000 at any one time. Notwithstanding anything in this paragraph to the
contrary, the term "Permitted Liens" shall not include Liens resulting from the
creation, incurrence, issuance, assumption or Guarantee of any Production
Payments and Reserve Sales other than (a) any such Liens existing as of the
Issue Date, (b) Production Payments and Reserve Sales in connection with the
acquisition of any Property after the Issue Date, provided that any such Lien
created in connection therewith is created, incurred, issued, assumed or
guaranteed in connection with the financing of, and within 60 days after the
acquisition of, such Property, (c) Production Payments and Reserve Sales, other
than those described in clauses (a) and (b) of this sentence, to the extent such
Production Payments and Reserve Sales constitute
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Asset Sales made pursuant to and in compliance with Section 4.06 and (d)
incentive compensation programs for geologists, geophysicists and other
providers of technical services to the Company or a Restricted Subsidiary;
provided, however, that, in the case of the immediately foregoing clauses (a),
(b), (c) and (d), any Lien created in connection with any such Production
Payments and Reserve Sales shall be limited to the Property that is the subject
of such Product Payments and Reserve Sales.
"Permitted Refinancing Indebtedness" means Indebtedness ("new
Indebtedness") Incurred in exchange for, or proceeds of which are used to
refinance, other Indebtedness ("old Indebtedness"); provided, however, that (i)
such new Indebtedness is in an aggregate principal amount not in excess of the
sum of (a) the aggregate principal amount then outstanding of the old
Indebtedness (or, if such old Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of determination), and
(b) an amount necessary to pay any fees and expenses, including premiums,
related to such exchange or refinancing, (ii) such new Indebtedness has a Stated
Maturity no earlier than the Stated Maturity of the old Indebtedness, (iii) such
new Indebtedness has an Average Life at the time such new Indebtedness is
Incurred that is equal to or greater than the Average Life of the old
Indebtedness at such time, (iv) such new Indebtedness is subordinated in right
of payment to the Securities (or, if applicable, the Subsidiary Guaranties) to
at least the same extent, if any, as the old Indebtedness and (v) if such old
Indebtedness is Non-recourse Purchase Money Indebtedness or Indebtedness that
refinanced Non-recourse Purchase Money Indebtedness, such new Indebtedness
satisfies clauses (i) and (ii) of the definition of "Non-recourse Purchase Money
Indebtedness."
"Permitted Short-Term Investments" means (i) Investments in
U.S. Government Obligations maturing within one year of the date of acquisition
thereof, (ii) Investments in demand accounts, time deposit accounts,
certificates of deposit, bankers' acceptances and money market deposits maturing
within one year of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States of America or any
State thereof or the District of Columbia that is a member of the Federal
Reserve System having capital, surplus and undivided profits aggregating in
excess of $500,000,000 and whose long-term Indebtedness is rated "A" (or higher)
according to Xxxxx'x, (iii) Investments in deposits available for withdrawal on
demand with any commercial bank
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that is organized under the laws of any country in which the Company or any
Restricted Subsidiary maintains an office or is engaged in the Oil and Gas
Business, provided that (a) all such deposits have been made in such accounts in
the ordinary course of business and (b) such deposits do not at any one time
exceed $15,000,000 in the aggregate, (iv) repurchase and reverse repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) entered into with a bank meeting the
qualifications described in clause (ii), (v) Investments in commercial paper or
notes, maturing not more than one year after the date of acquisition, issued by
a corporation (other than an Affiliate of the Company) organized and in
existence under the laws of the United States of America or any State thereof or
the District of Columbia with a short-term rating at the time as of which any
Investment therein is made of "P-1" (or higher) according to Xxxxx'x or "A-1"
(or higher) according to S&P or a long-term rating at the time as of which any
Investment is made of "A3" (or higher) according to Xxxxx'x or "A-" (or higher)
according to S&P, (vi) Investments in any money market mutual fund having assets
in excess of $250,000,000 all of which consist of other obligations of the types
described in clauses (i), (ii), (iv) and (v) hereof and (vii) Investments in
asset-backed securities maturing within one year of the date of acquisition
thereof with a long-term rating at the time as of which any Investment therein
is made of "A3" (or higher) according to Xxxxx'x or "A-" (or higher) according
to S&P.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, unlimited liability company, trust, estate,
unincorporated organization or government or any agency or political
subdivision thereof.
"Preferred Stock" of any Person means Capital Stock of such
Person of any class or classes (however designated) that ranks prior to, as to
the payment of dividends or as to the distribution of assets upon any voluntary
or involuntary liquidation, dissolution or winding up of such Person, to shares
of Capital Stock of any other class of such Person; provided however, that
"Preferred Stock" shall not include Redeemable Stock.
"principal" of any Indebtedness (including the Securities)
means the principal amount of such Indebtedness plus the premium, if any, on
such Indebtedness.
"Production Payments and Reserve Sales" means the grant or
transfer by the Company or a Restricted Subsidiary
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26
to any Person of a royalty, overriding royalty, net profits interest, production
payment (whether volumetric or dollar denominated), partnership or other
interest in oil and gas properties, reserves or the right to receive all or a
portion of the production or the proceeds from the sale of production
attributable to such properties where the holder of such interest has recourse
solely to such production or proceeds of production, subject to the obligation
of the grantor or transferor to operate and maintain, or cause the subject
interests to be operated and maintained, in a reasonably prudent manner or other
customary standard or subject to the obligation of the grantor or transferor to
indemnify for environmental, title or other matters customary in the Oil and Gas
Business, including any such grants or transfers pursuant to incentive
compensation programs on terms that are reasonably customary in the Oil and Gas
Business for geologists, geophysicists and other providers of technical services
to the Company or a Restricted Subsidiary.
"Property" means, with respect to any Person, any interest of
such Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including Capital Stock and other securities issued
by any other Person (but excluding Capital Stock or other securities issued by
such first mentioned Person).
"Redeemable Stock" of any Person means any equity security of
such Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or otherwise (including on the
happening of an event), is or could become required to be redeemed for cash or
other Property or is or could become redeemable for cash or other Property at
the option of the holder thereof, in whole or in part, on or prior to the first
anniversary of the Stated Maturity of the Securities; or is or could become
exchangeable at the option of the holder thereof for Indebtedness at any time
in whole or in part, on or prior to the first anniversary of the Stated
Maturity of the Securities; provided, however, that Redeemable Stock shall not
include any security by virtue of the fact that it may be exchanged or
converted at the option of the holder for Capital Stock of the Company having
no preference as to dividends or liquidation over any other Capital Stock of
the Company.
"Representative" means the trustee, agent or representative
expressly authorized to act in such capacity, if any, for an issue of Senior
Indebtedness.
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"Restricted Payment" means (i) a dividend or other
distribution declared or paid on the Capital Stock or Redeemable Stock of the
Company or to the Company's shareholders (other than dividends, distributions or
payments made solely in Capital Stock of the Company or in options, warrants or
other rights to purchase or acquire Capital Stock), or declared and paid to any
Person other than the Company or any of its Restricted Subsidiaries (and, if
such Restricted Subsidiary is not a Wholly Owned Subsidiary, to the other
shareholders of such Restricted Subsidiary on a pro rata basis) on the Capital
Stock or Redeemable Stock of any Restricted Subsidiary, (ii) a payment made by
the Company or any of its Restricted Subsidiaries (other than to the Company or
any Restricted Subsidiary) to purchase, redeem, acquire or retire any Capital
Stock or Redeemable Stock, or any options, warrants or other rights to acquire
Capital Stock or Redeemable Stock, of the Company or of a Restricted Subsidiary,
(iii) a payment made by the Company or any of its Restricted Subsidiaries to
redeem, repurchase, legally defease or otherwise acquire or retire for value
(including pursuant to mandatory repurchase covenants), prior to any scheduled
maturity, scheduled sinking fund or scheduled mandatory redemption, any
Indebtedness of the Company or a Restricted Subsidiary which is subordinate
(whether pursuant to its terms or by operation of law) in right of payment to
the Securities or the relevant Subsidiary Guaranty, as the case may be, provided
that this clause (iii) shall not include any such payment with respect to (a)
any such subordinated Indebtedness to the extent of Excess Proceeds remaining
after compliance with Section 4.06 and to the extent required by the indenture
or other agreement or instrument pursuant to which such subordinated
Indebtedness was issued or (b) the purchase, repurchase or other acquisition of
any such subordinated Indebtedness purchased in anticipation of satisfying a
scheduled maturity, scheduled sinking fund or scheduled mandatory redemption, in
each case due within one year of the date of acquisition, or (iv) an Investment
(other than a Permitted Investment) by the Company or a Restricted Subsidiary in
any Person.
"Restricted Subsidiary" means any Subsidiary of the Company
that has not been designated an Unrestricted Subsidiary pursuant to Section
4.15.
"S&P" means Standard & Poor's Ratings Service, a division of
The XxXxxx-Xxxx Companies, Inc. and its successors.
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"Sale and Leaseback Transaction" means, with respect to any
Person, any direct or indirect arrangement (excluding, however, any such
arrangement between such Person and a Wholly Owned Subsidiary of such Person or
between one or more Wholly Owned Subsidiaries of such Person) pursuant to which
Property is sold or transferred by such Person or a Restricted Subsidiary of
such Person and is thereafter leased back from the purchaser or transferee
thereof by such Person or one of its Restricted Subsidiaries.
"SEC" means the Securities and Exchange Commission.
"Senior Indebtedness" when used with respect to the Company
means the obligations of the Company with respect to Indebtedness of the
Company, whether outstanding on the date hereof or thereafter created, Incurred
or assumed, and any renewal, refunding, refinancing, replacement or extension
thereof, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Securities; provided, however, that Senior Indebtedness of the
Company shall not include (i) Indebtedness of the Company to a Subsidiary of
the Company, (ii) amounts owed for goods, materials or services purchased in
the ordinary course of business, (iii) Indebtedness Incurred in violation of
this Indenture, (iv) amounts payable or any other Indebtedness to employees of
the Company or any Subsidiary of the Company, (v) any liability for federal,
state, local or other taxes owed or owing by the Company, (vi) any Indebtedness
of the Company that, when Incurred and without regard to any election under
Section 1111(b) of the United States Bankruptcy Code, was without recourse to
the Company, (vii) Pari Passu or Subordinated Indebtedness of the Company,
(viii) Indebtedness of the Company that is represented by Redeemable Stock,
(ix) Indebtedness evidenced by the Securities and (x) in-kind obligations
relating to net oil and gas balancing positions. "Senior Indebtedness" of any
Subsidiary Guarantor has a correlative meaning, provided that clause (i) above
shall be deemed to refer to Indebtedness of any Subsidiary Guarantor to the
Company or any Subsidiary of the Company.
"Significant Subsidiary" means, at any date of determination,
any Restricted Subsidiary that would be a "Significant Subsidiary" of the
Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the
SEC.
"Stated Maturity," when used with respect to any security or
any installment of principal thereof or interest
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thereon, means the date specified in such security as the fixed date on which
the principal of such security or such installment of principal or interest is
due and payable, including pursuant to any mandatory redemption provision (but
excluding any provision providing for the repurchase of such security at the
option of the holder thereof upon the happening of any contingency unless such
contingency has occurred).
"Subordinated Indebtedness" means Indebtedness of the Company
(or a Subsidiary Guarantor) that is subordinated or junior in right of payment
to the Securities (or a Subsidiary Guaranty, as appropriate) pursuant to a
written agreement to that effect.
"Subsidiary" of a Person means (i) another Person which is a
corporation a majority of whose Voting Stock is at the time, directly or
indirectly, owned or controlled by (a) the first Person, (b) the first Person
and one or more of its Subsidiaries or (c) one or more of the first Person's
Subsidiaries or (ii) another Person which is not a corporation (x) at least 50%
of the ownership interest of which and (y) the power to elect or direct the
election of a majority of the directors or other governing body of which are
controlled by Persons referred to in clause (a), (b) or (c) above.
"Subsidiary Guarantors" means, unless released from their
Subsidiary Guaranties as permitted by this Indenture, any Restricted Subsidiary
that becomes a guarantor of the Securities in compliance with the provisions of
this Indenture and executes a supplemental indenture agreeing to be bound by
the terms of this Indenture, until a successor replaces such Restricted
Subsidiary pursuant to the applicable provisions hereof and, thereafter, means
the successor.
"Subsidiary Guaranty" means an unconditional, unsecured senior
subordinated guaranty of the Securities given by any Restricted Subsidiary
pursuant to the terms of this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of this Indenture except as
required by Section 9.03 hereof; provided that in the event the Trust Indenture
Act of 1939 is amended after such date, "Trust Indenture Act" means, to the
extent required by any such amendment, the Trust Indenture Act of 1939, as so
amended.
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"Trade Accounts Payable" means accounts payable or other
obligations of the Company or any Restricted Subsidiary to trade creditors
created or assumed by the Company or such Restricted Subsidiary in the ordinary
course of business in connection with the obtaining of goods or services.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means (i) each Subsidiary of the
Company that the Company has designated pursuant to Section 4.15 as an
Unrestricted Subsidiary and (ii) any Subsidiary of an Unrestricted Subsidiary.
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States of America for the timely payment of
which its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America, the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act), as custodian, with
respect to any such U.S. Government Obligation or a specific payment of
principal of or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depository receipt; provided,
however, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or interest on
the U.S. Government Obligation evidenced by such depository receipt.
"Volumetric Production Payments" means production payment
obligations recorded as deferred revenue in accordance with GAAP, together with
all undertakings and obligations in connection therewith.
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"Voting Stock" of any Person means Capital Stock of such
Person which ordinarily has voting power for the election of directors (or
persons performing similar functions) of such Person whether at all times or
only so long as no senior class of securities has such voting power by reason
of any contingency.
"Wholly Owned Subsidiary" means, at any time, a Restricted
Subsidiary of the Company all the Voting Stock of which (other than directors'
qualifying shares) is at such time owned, directly or indirectly, by the
Company and its other Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Change of Control Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . 4.09
"Change of Control Payment" . . . . . . . . . . . . . . . . . . . . . . . . . 4.09
"Change of Control Payment Date" . . . . . . . . . . . . . . . . . . . . . . 4.09
"Claiming Guarantor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.02
"Contributing Party" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.02
"covenant defeasance option" . . . . . . . . . . . . . . . . . . . . . . . . 8.01(b)
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Excess Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.06
"Global Security" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix A
"legal defeasance option" . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01(b)
"Legal Holiday" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.08
"Obligations" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
"Offer Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.06
"Offer Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.06
"OID" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
"Original Securities" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
"pay its Subsidiary Guaranty" . . . . . . . . . . . . . . . . . . . . . . . . 12.03
"pay the Securities" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
"Payment Blockage Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03
"Payment Blockage Period" . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03
"Permitted Consideration" . . . . . . . . . . . . . . . . . . . . . . . . . . 4.06
"Prepayment Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.06
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"Prepayment Offer Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . 4.06
"Purchase Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.06
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
"Successor Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01
SECTION 1.03. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA which
are incorporated by reference in and made a part of this Indenture. The
following TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company, each
Subsidiary Guarantor and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
SECTION 1.04. 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) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
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(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be the
greater of (i) the maximum liquidation value of such Preferred Stock
or (ii) the maximum mandatory redemption or mandatory repurchase price
with respect to such Preferred Stock.
ARTICLE 2
The Securities
SECTION 2.01. Amount of Securities; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is $150,000,000. All Securities shall be
identical in all respects other than issue price and issuance dates. The
Securities may be issued in one or more series; provided, however, that any
Securities issued with original issue discount ("OID") for Federal income tax
purposes shall not be issued as part of the same series as any Securities that
are issued with a different amount of OID or are not issued with OID. All
Securities of any one series shall be substantially identical except as to
denomination.
Subject to Section 2.03, the Trustee shall authenticate
Securities for original issue on the Issue Date in the aggregate principal
amount of $100,000,000 (the "Original Securities"). With respect to any
Securities issued after the Issue Date (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities pursuant to Section 2.07, 2.08, 2.09 or 3.06 or Appendix A),
there shall be established in or pursuant to a resolution of the Board of
Directors and, subject to Section 2.03, set forth or determined in the manner
provided in an Officer's Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of such Securities:
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(1) whether such Securities shall be issued as part of a new
or existing series of Securities and the title of such Securities
(which shall distinguish the Securities of the series from Securities
of any other series);
(2) the aggregate principal amount of such Securities which
may be authenticated and delivered under this Indenture, which shall
be in an aggregate principal amount not to exceed $50,000,000 (except
for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of
the same series pursuant to Section 2.07, 2.08, 2.09 or 3.06 or
Appendix A and except for Securities which, pursuant to Section 2.03,
are deemed never to have been authenticated and delivered hereunder);
(3) the issue price and issuance date of such Securities,
including the date from which interest on such Securities shall
accrue;
(4) if applicable, that such Securities shall be issuable in
whole or in part in the form of one or more Global Securities and, in
such case, the respective depositories for such Global Securities, the
form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Exhibit 1 to
Appendix A and any circumstances in addition to or in lieu of those
set forth in Section 2.3 of Appendix A in which any such Global
Security may be exchanged in whole or in part for Securities
registered, and any transfer of such Global Security in whole or in
part may be registered, in the name or names of Persons other than the
depository for such Global Security or a nominee thereof; and
(5) if applicable, that such Securities shall not be issued in
the form of Initial Securities subject to Appendix A, but shall be
issued in the form of Exchange Securities as set forth in Exhibit A.
If any of the terms of any series are established by action
taken pursuant to a resolution of the Board of Directors, a copy of an
appropriate record of such action shall be certified by the Secretary or any
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate or the trust indenture supplementary
thereto setting forth the terms of the series.
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Notwithstanding anything to the contrary in this Section or
otherwise in this Indenture, any additional issuance of Securities after the
Issue Date, whether such Securities are of the same or a different series than
the Original Securities, shall be in a principal amount greater than or equal
to $25,000,000.
SECTION 2.02. Form and Dating. Provisions relating to the
Initial Securities of each series and the Exchange Securities are set forth in
Appendix A, which is hereby incorporated in and expressly made a part of this
Indenture. The Initial Securities of each series and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit 1 to Appendix A
which is hereby incorporated in and expressly made a part of this Indenture.
The Exchange Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities of each series may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage, provided that any
such notation, legend or endorsement is in a form reasonably acceptable to the
Company. Each Security shall be dated the date of its authentication. The
terms of the Securities of each series set forth in Exhibit 1 to Appendix A and
Exhibit A are part of the terms of this Indenture.
SECTION 2.03. Execution and Authentication. Two Officers
shall sign the Securities for the Company by manual or facsimile signature.
The Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
written order of the Company signed by two Officers or by an Officer and either
an Assistant Treasurer or an Assistant Secretary of the Company for the
authentication and delivery of such Securities, and the Trustee in accordance
with such written order of the Company shall authenticate and deliver such
Securities.
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A Security shall not be valid until an authorized officer of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by
the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or
agent for service of notices and demands.
SECTION 2.04. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange.
The Company may have one or more co-registrars and one or more additional
paying agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this
Indenture, which shall incorporate the terms of the TIA. The agreement shall
implement the provisions of this Indenture that relate to such agent. The
Company shall notify the Trustee of the name and address of any such agent. If
the Company fails to maintain a Registrar or Paying Agent, the Trustee shall
act as such and shall be entitled to appropriate compensation therefor pursuant
to Section 7.07. The Company or any of its domestically incorporated Wholly
Owned Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer
agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.05. Paying Agent To Hold Money in Trust. Prior to
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold
in trust for the benefit of
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Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company in making any such payment. If the
Company or a Wholly Owned Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.
SECTION 2.06. Securityholder Lists. The Trustee shall
preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Securityholders. If the Trustee
is not the Registrar, the Company shall furnish to the Trustee, in writing at
least five Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Securityholders.
SECTION 2.07. Replacement Securities. If a mutilated
Security is surrendered to the Registrar or if the Holder of a Security claims
that such Security has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Security if the
requirements of Section 8-405 of the Uniform Commercial Code are met and the
Holder satisfies any other reasonable requirements of the Trustee. If required
by the Trustee or the Company, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from
any loss which any of them may suffer if a Security is replaced. The Company
and the Trustee may charge the Holder for their expenses in replacing a
Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities. Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancelation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
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If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. Temporary Securities. Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate definitive Securities
and deliver them in exchange for temporary Securities.
SECTION 2.10. Cancelation. The Company at any time may
deliver Securities to the Trustee for cancelation. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else
shall cancel and destroy (subject to the record retention requirements of the
Exchange Act) all Securities surrendered for registration of transfer, exchange,
payment or cancelation and shall, upon written request, deliver a certificate of
such destruction to the Company unless the Company directs the Trustee to
deliver canceled Securities to the Company. The Company may not issue new
Securities to replace Securities it has redeemed, paid or delivered to the
Trustee for cancelation.
SECTION 2.11. Defaulted Interest. If the Company defaults in
a payment of interest on the Securities, the Company shall pay defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any
lawful manner. The Company may pay the defaulted interest to the persons who
are Securityholders on a subsequent special record date. The Company shall fix
or cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
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Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify
the Trustee in writing of the redemption date, the principal amount of
Securities to be redeemed and that such redemption is being made pursuant to
paragraph 5 of the Securities.
The Company shall give each notice to the Trustee provided for
in this Section at least 45 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed. If
less than all the Securities are to be redeemed at any time, selection of
Securities for redemption may be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
the Securities are listed, or, if the Securities are not so listed, on a pro
rata basis, by lot or by such other method that the Trustee shall deem fair and
appropriate. The Trustee shall make the selection from outstanding Securities
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than
$1,000. Securities and portions of them the Trustee selects shall be in
amounts of $1,000 or a whole multiple of $1,000. Provisions of this Indenture
that apply to Securities called
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for redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not
more than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on
Securities (or portion thereof) called for redemption ceases to accrue
on and after the redemption date; and
(7) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable
on the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of
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Holders of record on the relevant record date to receive interest due on the
relevant interest payment date that is on or prior to the date of redemption).
Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest (subject to the right of Holders of record on the relevant record date
to receive interest due on the relevant interest payment date that is on or
prior to the date of redemption) on all Securities to be redeemed on that date
other than Securities or portions of Securities called for redemption which
have been delivered by the Company to the Trustee for cancelation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of
a Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities. The Company shall
promptly pay the principal of and interest on the Securities on the dates and
in the manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee
or the Paying Agent holds in accordance with this Indenture money sufficient to
pay all principal and interest then due and the Trustee or the Paying Agent, as
the case may be, is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Notwithstanding that the Company
may not be required to remain subject to the reporting requirements of Section
13 or 15(d) of the
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Exchange Act, the Company shall file with the SEC and provide the Trustee and
Holders of Securities with the annual reports and the information, documents and
other reports which are specified in Sections 13 and 15(d) of the Exchange Act,
and, with respect to the annual consolidated financial statements only, a report
thereon by the Company's independent auditors; provided, however, that the
Company shall not be so obligated to file such information, documents and
reports with the SEC if the SEC does not permit such filings. The Company also
shall comply with the other provisions of Section 314(a) of the Trust Indenture
Act.
SECTION 4.03. Limitation on Indebtedness. The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, Incur any Indebtedness unless, after giving pro forma effect to the
Incurrence of such Indebtedness and the receipt and application of the proceeds
thereof, no Default or Event of Default would occur as a consequence of, or be
continuing following, such Incurrence and application and either (a) after
giving pro forma effect to such Incurrence and application, the Consolidated
Interest Coverage Ratio would exceed 2.5 to 1.0 or (b) such Indebtedness is
Permitted Indebtedness.
SECTION 4.04. Limitation on Restricted Payments. (a) The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, make any Restricted Payment if, at the time of and
after giving effect to the proposed Restricted Payment, (i) any Default or
Event of Default would have occurred and be continuing, (ii) the Company could
not Incur at least $1.00 of additional Indebtedness pursuant to clause (a) of
Section 4.03 or (iii) the aggregate amount expended or declared for all
Restricted Payments from the Issue Date would exceed the sum (without
duplication) of the following:
(A) 50% of the aggregate Consolidated Net Income of the
Company accrued on a cumulative basis commencing on the last day of
the fiscal quarter immediately preceding the Issue Date, and ending on
the last day of the fiscal quarter ending on or immediately preceding
the date of such proposed Restricted Payment (or, if such aggregate
Consolidated Net Income shall be a loss, minus 100% of such loss),
plus
(B) the aggregate net cash proceeds, or the Fair Market Value
of Property other than cash, received by the Company on or after the
Issue Date from the issuance or sale (other than to a Subsidiary of
the
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Company) of Capital Stock of the Company or any options, warrants or
rights to purchase Capital Stock of the Company, plus
(C) the aggregate net cash proceeds, or the Fair Market Value
of Property other than cash, received by the Company as capital
contributions to the Company (other than from a Subsidiary of the
Company) on or after the Issue Date, plus
(D) the aggregate net cash proceeds received by the Company
from the issuance or sale (other than to any Subsidiary of the
Company) on or after the Issue Date of convertible Indebtedness that
has been converted into or exchanged for Capital Stock of the Company,
together with the aggregate cash received by the Company at the time
of such conversion or exchange or received by the Company from any
conversion or exchange of convertible Senior Indebtedness or
convertible Pari Passu Indebtedness issued or sold (other than to any
Subsidiary of the Company) prior to the Issue Date, plus
(E) to the extent not otherwise included in the Company's
Consolidated Net Income, an amount equal to the net reduction in
Investments made by the Company and its Restricted Subsidiaries
subsequent to the Issue Date in any Person resulting from (1) payments
of interest on debt, dividends, repayments of loans or advances or
other transfers or distributions of Property, in each case to the
Company or any Restricted Subsidiary from any Person other than the
Company or a Restricted Subsidiary, and in an amount not to exceed the
book value of such Investments previously made in such Person that
were treated as Restricted Payments, or (2) the designation of any
Unrestricted Subsidiary as a Restricted Subsidiary, and in an amount
not to exceed the lesser of (x) the book value of all Investments
previously made in such Unrestricted Subsidiary that were treated as
Restricted Payments and (y) the Fair Market Value of such Unrestricted
Subsidiary, plus
(F) $15,000,000.
(b) The limitations set forth in paragraph (a) above shall not prevent
the Company or any Restricted Subsidiary from making the following Restricted
Payments so long as, at the time thereof, no Default or Event of Default shall
have occurred and be continuing (except in the case of clause (i) below under
which the payment of a dividend is permitted):
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(i) the payment of any dividend on Capital Stock or Redeemable
Stock of the Company or any Restricted Subsidiary within 60 days after
the declaration thereof, if at such declaration date such dividend
could have been paid in compliance with paragraph (a) above;
(ii) the repurchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company or any of its
Subsidiaries held by any current or former officers, directors or
employees of the Company or any of its Subsidiaries pursuant to the
terms of agreements (including employment agreements) or plans approved
by the Board of Directors, including any such repurchase, redemption,
acquisition or retirement of shares of such Capital Stock that is
deemed to occur upon the exercise of stock options or similar rights if
such shares represent all or a portion of the exercise price or are
surrendered in connection with satisfying Federal income tax
obligations; provided, however, that the aggregate amount of such
repurchases, redemptions, acquisitions and retirements shall not exceed
the sum of (a) $1,000,000 in any twelve-month period and (b) the
aggregate net proceeds, if any, received by the Company during such
twelve-month period from any issuance of such Capital Stock pursuant to
such agreements or plans;
(iii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock or Redeemable Stock of the
Company or any Restricted Subsidiary, in exchange for, or out of the
aggregate net cash proceeds of, a substantially concurrent issuance
and sale (other than to a Subsidiary of the Company or an employee
stock ownership plan or trust established by the Company or any of its
Subsidiaries, for the benefit of their employees) of Capital Stock of
the Company;
(iv) the making of any principal payment on or the repurchase,
redemption, legal defeasance or other acquisition or retirement for
value, prior to any scheduled principal payment, scheduled sinking
fund payment or maturity, of any Subordinated Indebtedness (other than
Redeemable Stock) in exchange for, or out of the aggregate net cash
proceeds of, a substantially concurrent issuance and sale (other than
to a Subsidiary of the Company or an employee stock ownership plan or
trust established by the Company or
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any of its Subsidiaries, for the benefit of their employees) of Capital
Stock of the Company;
(v) the making of any principal payment on or the repurchase,
redemption, legal defeasance or other acquisition or retirement for
value of Subordinated Indebtedness in exchange for, or out of the
aggregate net cash proceeds of a substantially concurrent Incurrence
(other than a sale to a Subsidiary of the Company) of Subordinated
Indebtedness so long as such new Indebtedness is Permitted Refinancing
Indebtedness and (A) has an Average Life that is longer than the
Average Life of the Securities and (B) has a Stated Maturity for its
final scheduled principal payment that is more than one year after the
Stated Maturity of the final scheduled principal payment of the
Securities; and
(vi) loans made to officers, directors or employees of the
Company or any Restricted Subsidiary approved by the Board of
Directors (or a duly authorized officer), the net cash proceeds of
which are used solely (A) to purchase common stock of the Company in
connection with a restricted stock or employee stock purchase plan, or
to exercise stock options received pursuant to an employee or director
stock option plan or other incentive plan, in a principal amount not
to exceed the exercise price of such stock options or (B) to
refinance loans, together with accrued interest thereon, made pursuant
to item (A) of this clause (vi).
The actions described in clauses (i) and (ii) of this paragraph (b) shall be
included in the calculation of the amount of Restricted Payments. The actions
described in clauses (iii), (iv), (v) and (vi) of this paragraph (b) shall be
excluded in the calculation of the amount of Restricted Payments, provided that
the net cash proceeds from any issuance or sale of Capital Stock of the Company
pursuant to such clause (iii), (iv) or (vi) shall be excluded from any
calculations pursuant to clause (B) or (C) under the immediately preceding
paragraph (a).
(c) In computing Consolidated Net Income of the Company under
paragraph (a) above, (1) the Company shall use audited financial statements for
the portions of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based on the books and records of the Company for
the remaining portion of such period and (2) the Company shall be permitted to
rely in good faith on the financial statements and other financial data derived
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46
from the books and records of the Company that are available on the date of
determination. If the Company makes a Restricted Payment which, at the time of
the making of such Restricted Payment, would in the good faith determination of
the Company be permitted under the requirements of this Indenture, such
Restricted Payment shall be deemed to have been made in compliance with this
Indenture notwithstanding any subsequent adjustments made in good faith to the
Company's financial statements affecting Consolidated Net Income of the Company
for any period.
SECTION 4.05. Limitation on Restrictions on Distributions
from Restricted Subsidiaries. The Company shall not, and shall not permit any
of its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or permit to exist or become effective any consensual encumbrance or
restriction on the legal right of any Restricted Subsidiary to (i) pay
dividends, in cash or otherwise, or make any other distributions on or in
respect of its Capital Stock or Redeemable Stock, or pay any Indebtedness or
other obligation owed, to the Company or any other Restricted Subsidiary, (ii)
make loans or advances to the Company or any other Restricted Subsidiary or
(iii) transfer any of its Property to the Company or any other Restricted
Subsidiary. Such limitation shall not apply (a) with respect to clauses (i),
(ii) and (iii), to encumbrances and restrictions (1) in the Bank Credit
Facilities and other agreements and instruments, in each case as in effect on
the Issue Date, (2) relating to Indebtedness of a Restricted Subsidiary and
existing at the time it became a Restricted Subsidiary if such encumbrance or
restriction was not created in anticipation of or in connection with the
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or (3) which result from the renewal, refinancing, extension or
amendment of an agreement that is the subject of clause (a)(1) or (2) above or
clause (b)(1) or (2) below, provided that such encumbrance or restriction is
not materially less favorable to the Holders of Securities than those under or
pursuant to the agreement so renewed, refinanced, extended or amended, and (b)
with respect to clause (iii) only, to (1) any restriction on the sale, transfer
or other disposition of Property relating to Indebtedness that is permitted to
be Incurred and secured under Sections 4.03 and 4.10, (2) any encumbrance or
restriction applicable to Property at the time it is acquired by the Company or
a Restricted Subsidiary, so long as such encumbrance or restriction relates
solely to the Property so acquired and was not created in anticipation of or in
connection with such acquisition, (3) customary provisions restricting
subletting or assignment of leases and customary provisions
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47
in other agreements that restrict assignment of such agreements or rights
thereunder and (4) customary restrictions contained in asset sale agreements
limiting the transfer of such assets pending the closing of such sale.
SECTION 4.06. Limitation on Asset Sales. (a) The Company
shall not, and shall not permit any of its Restricted Subsidiaries to,
consummate any Asset Sale unless (i) the Company or such Restricted Subsidiary,
as the case may be, receives consideration at the time of such Asset Sale at
least equal to the Fair Market Value of the Property subject to such Asset Sale
and (ii) all of the consideration paid to the Company or such Restricted
Subsidiary in connection with such Asset Sale is in the form of cash, cash
equivalents, Liquid Securities, Exchanged Properties or the assumption by the
purchaser of liabilities of the Company (other than liabilities of the Company
that are by their terms subordinated to the Securities) or liabilities of any
Subsidiary Guarantor that made such Asset Sale (other than liabilities of a
Subsidiary Guarantor that are by their terms subordinated to such Subsidiary
Guarantor's Subsidiary Guaranty), in each case as a result of which the Company
and its remaining Restricted Subsidiaries are no longer liable for such
liabilities ("Permitted Consideration"); provided, however, that the Company
and its Restricted Subsidiaries shall be permitted to receive Property other
than Permitted Consideration, so long as the aggregate Fair Market Value of all
such Property other than Permitted Consideration received from Asset Sales and
held by the Company or any Restricted Subsidiary at any one time shall not
exceed 10.0% of Adjusted Consolidated Net Tangible Assets.
The Net Available Cash from Asset Sales by the Company or a Restricted
Subsidiary may be applied by the Company or such Restricted Subsidiary, to the
extent the Company or such Restricted Subsidiary elects (or is required by the
terms of any Senior Indebtedness of the Company or a Subsidiary Guarantor), to
(i) prepay, repay or purchase Senior Indebtedness of the Company or a
Subsidiary Guarantor (in each case excluding Indebtedness owed to the Company
or an Affiliate of the Company), (ii) to reinvest in Additional Assets
(including by means of an Investment in Additional Assets by a Restricted
Subsidiary with Net Available Cash received by the Company or another
Restricted Subsidiary) or (iii) purchase Securities or purchase both Securities
and one or more series or issues of other Pari Passu Indebtedness on a pro rata
basis (excluding Securities and Pari Passu Indebtedness owned by the Company or
an Affiliate of the Company). Pending any reinvestment pursuant to clause (ii)
in the preceding sentence, the Company may
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temporarily prepay, repay or purchase Senior Indebtedness of the Company or a
Subsidiary Guarantor.
(b) Any Net Available Cash from an Asset Sale not applied in
accordance with the preceding paragraph within 365 days from the date of such
Asset Sale shall constitute "Excess Proceeds." When the aggregate amount of
Excess Proceeds exceeds $10,000,000, the Company shall be required to make an
offer to purchase Securities having an aggregate principal amount equal to the
aggregate amount of Excess Proceeds (the "Prepayment Offer") at a purchase
price equal to 100% of the principal amount of such Securities plus accrued and
unpaid interest, if any, to the Purchase Date (as defined) in accordance with
the procedures (including prorating in the event of oversubscription) set forth
herein, but, if the terms of any Pari Passu Indebtedness require that a Pari
Passu Offer be made contemporaneously with the Prepayment Offer, then the
Excess Proceeds shall be prorated between the Prepayment Offer and such Pari
Passu Offer in accordance with the aggregate outstanding principal amounts of
the Securities and such Pari Passu Indebtedness, and the aggregate principal
amount of Securities for which the Prepayment Offer is made shall be reduced
accordingly. If the aggregate principal amount of Securities tendered by
Holders thereof exceeds the amount of available Excess Proceeds, then such
Excess Proceeds shall be allocated pro rata according to the principal amount
of the Securities tendered and the Trustee shall select the Securities to be
purchased in accordance herewith. To the extent that any portion of the amount
of Excess Proceeds remains after compliance with the second sentence of this
paragraph and provided that all Holders of Securities have been given the
opportunity to tender their Securities for purchase as described in the
following paragraph in accordance with this Indenture, the Company and its
Restricted Subsidiaries may use such remaining amount for purposes permitted by
this Indenture and the amount of Excess Proceeds shall be reset to zero.
(c) (1) Within 30 days after the 365th day following the date
of an Asset Sale, the Company shall, if it is obligated to make an offer to
purchase the Securities pursuant to the preceding paragraph, send a written
Prepayment Offer notice, by first-class mail, to the Trustee and the Holders of
the Securities (the "Prepayment Offer Notice"), accompanied by such information
regarding the Company and its Subsidiaries as the Company believes shall enable
such Holders of the Securities to make an informed decision with respect to the
Prepayment Offer (which at a minimum shall include (i) the most recently filed
Annual Report on Form 10-K (including audited consolidated financial
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49
statements) of the Company, the most recent subsequently filed Quarterly Report
on Form 10-Q of the Company and any Current Report on Form 8-K of the Company
filed subsequent to such Quarterly Report, other than Current Reports describing
Asset Sales otherwise described in the offering materials, or corresponding
successor reports (or, during any time that the Company is not subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, corresponding
reports prepared pursuant to Section 4.02), (ii) a description of material
developments in the Company's business subsequent to the date of the latest of
such reports and (iii) if material, appropriate pro forma financial
information). The Prepayment Offer Notice shall state, among other things, (i)
that the Company is offering to purchase Securities pursuant to the provisions
of this Indenture, (ii) that any Security (or any portion thereof) accepted for
payment (and duly paid on the Purchase Date) pursuant to the Prepayment Offer
shall cease to accrue interest on the Purchase Date, (iii) that any Securities
(or portions thereof) not properly tendered shall continue to accrue interest,
(iv) the purchase price and purchase date, which shall be, subject to any
contrary requirements of applicable law, no less than 30 days nor more than 60
days after the date the Prepayment Offer Notice is mailed (the "Purchase Date"),
(v) the aggregate principal amount of Securities to be purchased, (vi) a
description of the procedure which Holders of Securities must follow in order to
tender their Securities and the procedures that Holders of Securities must
follow in order to withdraw an election to tender their Securities for payment
and (vii) all other instructions and materials necessary to enable Holders to
tender Securities pursuant to the Prepayment Offer.
(2) Not later than the date upon which written notice of a
Prepayment Offer is delivered to the Trustee as provided above, the Company
shall deliver to the Trustee an Officers' Certificate as to (i) the amount of
the Prepayment Offer (the "Offer Amount"), (ii) the allocation of the Net
Available Cash from the Asset Sales pursuant to which such Prepayment Offer is
being made and (iii) the compliance of such allocation with the provisions of
Section 4.06(a). On such date, the Company shall also irrevocably deposit with
the Trustee or with the Paying Agent (or, if the Company or a Wholly Owned
Subsidiary is the Paying Agent, shall segregate and hold in trust) in Permitted
Short-Term Investments, maturing on the last day prior to the Purchase Date or
on the Purchase Date if funds are immediately available by open of business, an
amount equal to the Offer Amount to be held for payment in accordance with the
provisions of this Section. Upon the expiration of the period
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for which the Prepayment Offer remains open (the "Offer Period"), the Company
shall deliver to the Trustee for cancelation the Securities or portions thereof
which have been properly tendered to and are to be accepted by the Company. The
Trustee or the Paying Agent shall, on the Purchase Date, mail or deliver payment
to each tendering Holder in the amount of the purchase price. In the event that
the aggregate purchase price of the Securities delivered by the Company to the
Trustee is less than the Offer Amount, the Trustee or the Paying Agent shall
deliver the excess to the Company immediately after the expiration of the Offer
Period for application in accordance with this Section.
(3) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company or its agent at the address specified in the notice at least three
Business Days prior to the Purchase Date. Holders shall be entitled to withdraw
their election if the Trustee or the Company receives not later than one
Business Day prior to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Security
purchased. If at the expiration of the Offer Period the aggregate principal
amount of Securities surrendered by Holders exceeds the Offer Amount, the
Company shall select the Securities to be purchased on a pro rata basis (with
such adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000, or integral multiples thereof, shall be
purchased). Holders whose Securities are purchased only in part shall be issued
new Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.
(4) At the time the Company delivers Securities to the
Trustee which are to be accepted for purchase, the Company shall also deliver
an Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section 4.06. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee or the Paying Agent mails or delivers payment therefor to the
surrendering Holder.
(d) The Company shall comply, to the extent applicable, with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws or regulations thereunder to the extent such laws and regulations are
applicable in connection with the purchase of Securities as
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described above. To the extent that the provisions of any securities laws or
regulations conflict with the provisions relating to the Prepayment Offer, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations described above by virtue
thereof.
SECTION 4.07. Limitation on Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, conduct any business or enter into any
transaction or series of transactions (including the sale, transfer,
disposition, purchase, exchange or lease of Property, the making of any
Investment, the giving of any Guarantee or the rendering of any service) with or
for the benefit of any Affiliate of the Company (other than the Company or a
Wholly Owned Subsidiary), unless (i) such transaction or series of transactions
is on terms no less favorable to the Company or such Restricted Subsidiary than
those that could be obtained in a comparable arm's-length transaction with a
Person that is not an Affiliate of the Company or such Restricted Subsidiary,
and (ii) with respect to a transaction or series of transactions involving
aggregate payments by or to the Company or such Restricted Subsidiary having a
Fair Market Value equal to or in excess of (a) $1,000,000 but less than
$5,000,000, an Officer certifies that such transaction or series of transactions
complies with clause (i) of this paragraph, as evidenced by an Officer's
Certificate delivered to the Trustee, (b) $5,000,000 but less than $20,000,000,
the Board of Directors (including a majority of the disinterested members of
such Board of Directors) approves such transaction or series of transactions and
certifies that such transaction or series of transactions complies with clause
(i) of this paragraph, as evidenced by a certified resolution delivered to the
Trustee, or (c) $20,000,000, (1) the Company receives from an independent,
nationally recognized investment banking firm or appraisal firm, in either case
specializing or having a specialty in the type and subject matter of the
transaction (or series of transactions) at issue, a written opinion that such
transaction (or series of transactions) is fair, from a financial point of view,
to the Company or such Restricted Subsidiary and (2) the Board of Directors
(including a majority of the disinterested members of such Board of Directors)
approves such transaction or series of transactions and certifies that such
transaction or series of transactions complies with clause (i) of this
paragraph, as evidenced by a certified resolution delivered to the Trustee.
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The limitations of the preceding paragraph do not apply to (i) the
payment of reasonable and customary regular fees to directors of the Company or
any of its Restricted Subsidiaries who are not employees of the Company or any
of its Restricted Subsidiaries, (ii) indemnities of officers and directors of
the Company or any Subsidiary consistent with such Person's charter, bylaws and
applicable statutory provisions, (iii) any issuance of securities, or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, stock options and stock ownership plans
approved by the Board of Directors, (iv) loans made (a) to officers, directors
or employees of the Company or any Restricted Subsidiary approved by the Board
of Directors (or by a duly authorized Officer), the proceeds of which are used
solely to purchase common stock of the Company in connection with a restricted
stock or employee stock purchase plan, or to exercise stock options received
pursuant to an employee or director stock option plan or other incentive plan,
in a principal amount not to exceed the exercise price of such stock options,
or (b) to refinance loans, together with accrued interest thereon, made
pursuant to this clause (iv), (v) advances and loans to officers, directors and
employees of the Company or any Subsidiary in the ordinary course of business,
provided such loans and advances (excluding loans or advances made pursuant to
the preceding clause (iv)) do not exceed $2,000,000 at any one time
outstanding, (vi) any Restricted Payment permitted to be paid pursuant to
Section 4.04, (vii) any transaction or series of transactions between the
Company and one or more Restricted Subsidiaries or between two or more
Restricted Subsidiaries in the ordinary course of business, provided that no
more than 10% of the total voting power of the Voting Stock of any such
Restricted Subsidiary is owned by an Affiliate of the Company (other than a
Restricted Subsidiary) and (viii) any transaction or series of transactions
pursuant to any agreement or obligation of the Company or any of its Restricted
Subsidiaries in effect on the Issue Date.
SECTION 4.08. Limitation on the Issuance and Sale of Capital
Stock of Restricted Subsidiaries. The Company shall not (i) permit any of its
Restricted Subsidiaries to sell or otherwise issue any Capital Stock other than
to the Company or one of its Wholly Owned Subsidiaries or (ii) permit any
Person other than the Company or a Wholly Owned Subsidiary to own any Capital
Stock or of any other Restricted Subsidiary, except, in each case, for (a)
directors' qualifying shares, (b) the Capital Stock of a Restricted Subsidiary
owned by a Person at the time such Restricted Subsidiary became a Restricted
Subsidiary or acquired by such Person in connection with the formation of
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such Restricted Subsidiary, or transfers thereof, or (c) a sale of all the
Capital Stock of a Restricted Subsidiary owned by the Company or its
Subsidiaries effected in accordance with Section 4.06. In the event of the
consummation of a sale of all the Capital Stock of a Restricted Subsidiary
pursuant to the foregoing clause (c) and the execution and delivery of a
supplemental indenture in form satisfactory to the Trustee, any such Restricted
Subsidiary that is also a Subsidiary Guarantor shall be released from all its
obligations under its Subsidiary Guaranty.
SECTION 4.09. Change of Control. (a) Upon the occurrence of
a Change of Control each Holder of Securities shall have the right to require
the Company to repurchase all or any part (equal to $1,000 in principal amount
or an integral multiple thereof) of such Holder's Securities pursuant to the
offer described below (the "Change of Control Offer") at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase, subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date (the "Change of Control Payment").
(b) Within 30 days following any Change of Control, the
Company shall mail a notice to each Holder stating: (i) that a Change of
Control has occurred and a Change of Control Offer is being made pursuant to
this Indenture and that all Securities (or portions thereof) properly tendered
shall be accepted for payment; (ii) the purchase price and the purchase date,
which shall be, subject to any contrary requirements of applicable law, no
fewer than 30 days nor more than 60 days from the date the Company mails such
notice (the "Change of Control Payment Date"); (iii) that any Security (or
portion thereof) accepted for payment (and duly paid on the Change of Control
Payment Date) pursuant to the Change of Control Offer shall cease to accrue
interest on the Change of Control Payment Date; (iv) that any Securities (or
portions thereof) not properly tendered shall continue to accrue interest; (v)
a description of the transaction or transactions constituting the Change of
Control; (vi) the procedures that Holders of Securities must follow in order to
tender their Securities (or portions thereof) for payment and the procedures
that Holders of Securities must follow in order to withdraw an election to
tender Securities (or portions thereof) for payment; and (vii) all other
instructions and materials necessary to enable Holders to tender Securities
pursuant to the Change of Control Offer.
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(c) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company or its agent at the address specified in the notice at least three
Business Days prior to the Change of Control Payment Date. Holders shall be
entitled to withdraw their election if the Trustee or the Company receives not
later than one Business Day prior to the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security which was delivered for purchase
by the Holder and a statement that such Holder is withdrawing his election to
have such Security purchased. Holders whose Securities are purchased only in
part shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(d) On or prior to the Change of Control Payment Date, the
Company shall irrevocably deposit with the Trustee or with the Paying Agent
(or, if the Company or any of its Wholly Owned Subsidiaries is acting as the
Paying Agent, segregate and hold in trust) in cash an amount equal to the
Change of Control Payment payable to the Holders entitled thereto, to be held
for payment in accordance with the provisions of this Section.
(e) On the Change of Control Payment Date, the Company shall
deliver to the Trustee the Securities or portions thereof which have been
properly tendered to and are to be accepted by the Company for payment. The
Trustee or the Paying Agent shall, on the Change of Control Payment Date, mail
or deliver payment to each tendering Holder of the Change of Control Payment.
In the event that the aggregate Change of Control Payment is less than the
amount delivered by the Company to the Trustee or the Paying Agent, the Trustee
or the Paying Agent, as the case may be, shall deliver the excess to the
Company immediately after the Change of Control Payment Date.
(f) The Company shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control
Offer made by the Company and purchases all Securities validly tendered and not
withdrawn under such Change of Control Offer.
(g) The Company shall comply, to the extent applicable, with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws or regulations
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thereunder to the extent such laws and regulations are applicable in connection
with the purchase of Securities pursuant to this Section. To the extent that
the provisions of any securities laws or regulations conflict with provisions
of this Section, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
this Section by virtue thereof.
SECTION 4.10. Limitation on Liens. The Company shall not,
and shall not permit any Restricted Subsidiary to, directly or indirectly,
enter into, create, Incur, assume or suffer to exist any Lien on or with
respect to any Property of the Company or such Restricted Subsidiary, whether
owned on the Issue Date or acquired after the Issue Date, or any interest
therein or any income or profits therefrom, unless the Securities or any
Subsidiary Guaranty of such Restricted Subsidiary are secured equally and
ratably with (or prior to) any and all other obligations secured by such Lien,
except that the Company and its Restricted Subsidiaries may enter into, create,
Incur, assume or suffer to exist Liens securing Senior Indebtedness and
Permitted Liens.
SECTION 4.11. Compliance Certificate. The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company an Officers' Certificate stating that in the course of the performance
by the signers of their duties as Officers of the Company they would normally
have knowledge of any Default and whether or not the signers know of any
Default that occurred during such period. If they do, the certificate shall
describe the Default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with TIA
Section 314(a)(4).
SECTION 4.12. Further Instruments and Acts. Upon request of
the Trustee, the Company shall execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.13. Future Subsidiary Guarantors. The Company
shall cause each Restricted Subsidiary that (i) Incurs Indebtedness following
the Issue Date or (ii) has Indebtedness or Preferred Stock outstanding on the
date on which such Restricted Subsidiary becomes a Restricted Subsidiary, to
execute and deliver to the Trustee, at the time such Restricted Subsidiary
Incurs such Indebtedness or becomes a Restricted Subsidiary, a supplemental
indenture in the form of Exhibit B pursuant to which such Subsidiary
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shall guaranty payment of the Securities as provided in Section 11.07; provided,
however, that such Restricted Subsidiary shall not be required to deliver a
Subsidiary Guaranty if the aggregate amount of such Indebtedness or Preferred
Stock, together with all other Indebtedness and Preferred Stock then outstanding
among Restricted Subsidiaries that are not Subsidiary Guarantors, is less than
$10,000,000.
SECTION 4.14. Incurrence of Layered Indebtedness. (i) The
Company shall not Incur any Indebtedness which is subordinated or junior in
right of payment to any Senior Indebtedness of the Company unless such
Indebtedness constitutes Indebtedness which is junior to, or pari passu with,
the Securities in right of payment and (ii) no Subsidiary Guarantor shall Incur
any Indebtedness that is subordinated or junior in right of payment to any
Senior Indebtedness of such Subsidiary Guarantor unless such Indebtedness
constitutes Indebtedness which is junior to, or pari passu with, such Subsidiary
Guarantor's Subsidiary Guaranty in right of payment.
SECTION 4.15. Restricted and Unrestricted Subsidiaries.
Unless defined or designated as an Unrestricted Subsidiary, any Person that
becomes a Subsidiary of the Company or any of its Restricted Subsidiaries shall
be classified as a Restricted Subsidiary subject to the provisions of the next
paragraph. The Company may designate a Subsidiary (including a newly formed or
newly acquired Subsidiary) of the Company or any of its Restricted Subsidiaries
as an Unrestricted Subsidiary if (i) such Subsidiary does not at such time own
any Capital Stock or Indebtedness of, or own or hold any Lien on any Property
of, the Company or any other Restricted Subsidiary, (ii) such Subsidiary does
not at such time have any Indebtedness or other obligations which, if in
default, would result (with the passage of time or notice or otherwise) in a
default on any Indebtedness of the Company or any Restricted Subsidiary and
(iii)(a) such designation is effective immediately upon such Subsidiary
becoming a Subsidiary of the Company or of a Restricted Subsidiary, (b) the
Subsidiary to be so designated has total assets of $1,000 or less or (c) if
such Subsidiary has assets greater than $1,000, then such redesignation as an
Unrestricted Subsidiary is deemed to constitute a Restricted Payment in an
amount equal to the Fair Market Value of the Company's direct and indirect
ownership interest in such Subsidiary, and such Restricted Payment would be
permitted to be made at the time of such designation under Section 4.04.
Except as provided in the immediately preceding sentence, no Restricted
Subsidiary may be redesignated as an Unrestricted
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Subsidiary. Upon designation of a Restricted Subsidiary as an Unrestricted
Subsidiary in compliance with this Section, such Restricted Subsidiary shall, by
delivery of a supplemental indenture in form satisfactory to the Trustee, be
released from any Subsidiary Guaranty previously made by such Subsidiary. The
designation of an Unrestricted Subsidiary or removal of such designation shall
be made by the Board of Directors pursuant to a certified resolution delivered
to the Trustee and shall be effective as of the date specified in the applicable
certified resolution, which shall not be prior to the date such certified
resolution is delivered to the Trustee.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, take any action or enter into any transaction or series of
transactions that would result in a Person becoming a Restricted Subsidiary
(whether through an acquisition or otherwise) unless, after giving effect to
such action, transaction or series of transactions, on a pro forma basis, (i)
the Company could Incur at least $1.00 of additional Indebtedness pursuant to
clause (a) of Section 4.03 and (ii) no Default or Event of Default would occur
or be continuing.
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets. The
Company shall not consolidate with or merge with or into any Person, or convey,
transfer or lease, in one transaction or a series of transactions, all or
substantially all its Property, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a Person organized or existing under the
laws of the United States of America, any State thereof or the
District of Columbia and the Successor Company (if not the Company)
shall expressly assume, by a supplemental indenture, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Securities and this Indenture;
(ii) in the case of a conveyance, transfer or lease of all or
substantially all the Company's Property, such Property shall have
been so conveyed, transferred or leased as an entirety or virtually as
an entirety to one Person; (iii) immediately after giving effect to
such transaction (and treating, for purposes of this clause (iii) and
clauses (iv) and (v) below, any Indebtedness which
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becomes or is anticipated to become an obligation of the Successor
Company or any Restricted Subsidiary as a result of such transaction as
having been Incurred by such Successor Company or such Restricted
Subsidiary at the time of such transaction), no Default or Event of
Default shall have occurred and be continuing; (iv) immediately after
giving effect to such transaction, the Successor Company would be able
to Incur an additional $1.00 of Indebtedness pursuant to clause (a) of
Section 4.03; (v) immediately after giving effect to such transaction,
the Successor Company shall have Consolidated Net Worth in an amount
that is not less than the Consolidated Net Worth of the Company
immediately prior to such transaction; and (vi) the Company shall have
delivered to the Trustee an Officer's Certificate, stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture.
The Successor Company shall be the successor to the Company
and shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture, but the predecessor Company in the
case of a conveyance, transfer or lease shall not be released from the
obligation to pay the principal of and interest on the Securities.
SECTION 5.02. When a Subsidiary Guarantor May Merge or
Transfer Assets. The Company shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or series of transactions, all or substantially all of its Property
to, any Person (other than the Company or any other Subsidiary Guarantor)
unless:
(a) the Successor Company (if not such Subsidiary) shall be a
person organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the
Successor Company (if not such Subsidiary) shall expressly assume, by
a supplemental indenture, in form satisfactory to the Trustee, all the
obligations of such Subsidiary under its Subsidiary Guaranty; (b) in
the case of a conveyance, transfer or lease of all or substantially
all the Property of such Subsidiary Guarantor, such Property shall
have been so conveyed, transferred or leased as an entirety or
virtually as an entirety to one Person; (c) immediately after giving
effect to such transaction (and treating, for purposes of this clause
(c) and clauses (d) and (e) below, any Indebtedness which becomes or
is anticipated to become an obligation
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of the Successor Company or the Company or any other Restricted
Subsidiary as a result of such transaction as having been Incurred by
such Person at the time of such transaction), no Default or Event of
Default shall have occurred and be continuing; (d) immediately after
giving effect to such transaction, the Company would be able to Incur
an additional $1.00 of Indebtedness pursuant to clause (a) of Section
4.03; (e) immediately after giving effect to such transaction, the
Company shall have Consolidated Net Worth in an amount that is not less
than the Consolidated Net Worth of the Company immediately prior to
such transaction; and (f) the Company shall have delivered to the
Trustee an Officers' Certificate, stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with
this Indenture. The provisions of clauses (a), (b), (d), (e) and (f)
above shall not apply to any transactions which constitute an Asset
Sale if the Company has complied with Section 4.06.
The Successor Company shall be the successor to the applicable
Subsidiary Guarantor and shall succeed to, and be substituted for, and may
exercise every right and power of such Subsidiary Guarantor under its Subsidiary
Guaranty, but the predecessor Subsidiary Guarantor in the case of a conveyance,
transfer or lease shall not be released from the obligation to pay the principal
of and interest on the Securities.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. The following events shall
be "Events of Default":
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, whether or not such
payment shall be prohibited by Article 10, and such default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal of
any Security when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise, whether or not such payment shall be
prohibited by Article 10;
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(3) the Company or any Subsidiary Guarantor fails to comply
with Article 5;
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty addressed in clauses (1), (2) or (3) above) and continuance
of such default or breach for a period of 60 days after the notice
specified below;
(5) default by the Company or any Restricted Subsidiary under
any Indebtedness for borrowed money (other than Non-recourse Purchase
Money Indebtedness) of the Company or any Restricted Subsidiary which
results in acceleration of the maturity of such Indebtedness, or the
failure to pay such Indebtedness at maturity, in an amount greater
than $5,000,000 or its foreign currency equivalent at the time if such
Indebtedness is not discharged or such acceleration is not rescinded
or annulled within 10 days after the notice specified below;
(6) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for any substantial part of its
property;
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(C) orders the winding up or liquidation of the
Company or any Significant Subsidiary; or
(D) grants any similar relief under any foreign laws;
and in each such case the order or decree remains unstayed and in
effect for 60 days;
(8) one or more final judgments or orders by a court of
competent jurisdiction are entered against the Company or any
Restricted Subsidiary in an uninsured or unindemnified aggregate
amount outstanding at any time in excess of $5,000,000 and such
judgments or orders are not discharged, waived, stayed, satisfied or
bonded for a period of 60 consecutive days; or
(9) a Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of this Indenture and
such Subsidiary Guaranty) or a Subsidiary Guarantor denies or
disaffirms its obligations under its Subsidiary Guaranty.
The foregoing shall constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (4) or (5) is not an Event of Default
until the Trustee or the Holders of at least 25% in aggregate principal amount
of the outstanding Securities notify the Company (and in the case of such
notice by Holders, the Trustee) in writing of such Default and the Company does
not cure such Default within the time specified after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default."
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default and any event which with the giving of notice or the
lapse of time would become an Event of Default, its status and what
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action the Company is taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other
than an Event of Default specified in Section 6.01(6) or (7)) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in aggregate principal amount of the Securities by notice to the Company and the
Trustee, may declare the principal of the Securities to be due and payable.
Upon such a declaration, such principal shall be due and payable immediately.
If an Event of Default specified in Section 6.01(6) or (7) occurs, the principal
of the Securities shall automatically and without any action by the Trustee or
any Holder, become immediately due and payable. The Holders of a majority in
aggregate principal amount of the outstanding Securities by notice to the
Trustee and the Company may rescind any declaration of acceleration if the
rescission would not conflict with any judgment or decree, and if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of the acceleration. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a
majority in aggregate principal amount of the Securities by notice to the
Trustee may waive an existing Default and its consequences except (i) a Default
in the payment of the principal of or interest on a Security or (ii) a Default
in respect of a provision that under Section 9.02 cannot be amended without the
consent of each Securityholder affected. When a Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
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SECTION 6.05. Control by Majority. The Holders of a majority
in aggregate principal amount of the Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
of exercising any trust or power conferred on the Trustee with respect to the
Securities. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or, subject to Section 7.01, that the
Trustee determines is unduly prejudicial to the rights of other Securityholders
or would involve the Trustee in personal liability; provided, however, that the
Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction. Prior to taking any action hereunder, the
Trustee shall be entitled to reasonable indemnity against all losses and
expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. A Securityholder may not
pursue any remedy with respect to this Indenture or the Securities unless:
(1) such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount
of the Securities then outstanding shall have made a written request,
and such Holder of or Holders shall have offered reasonable indemnity,
to the Trustee to pursue such proceeding as trustee; and
(3) the Trustee has failed to institute such proceeding and
has not received from the Holders of at least a majority in aggregate
principal amount of the Securities outstanding a direction
inconsistent with such request, within 60 days after such notice,
request and offer.
The foregoing limitations on the pursuit of remedies by a
Securityholder shall not apply to a suit instituted by a Holder of Securities
for the enforcement of payment of the principal of or interest on such Security
on or after the applicable due date specified in such Security. A
Securityholder may not use this Indenture to prejudice the rights of another
Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder,
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on or after the respective due dates expressed in this Securities, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of
Default specified in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.
SECTION 6.10. Priorities. If the Trustee collects any money
or property pursuant to this Article 6, it shall pay out the money or property
in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness of the Company to
the extent required by Article 10;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section.
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At least 15 days before such record date, the Company shall mail to each
Securityholder and the Trustee a notice that states the record date, the payment
date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in aggregate principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company
(to the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension 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 shall not hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been
enacted.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default
has occurred and is continuing, the Trustee shall exercise the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations
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shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
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(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely
on 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 Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. Individual Rights of Trustee. The Trustee in
its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent, Registrar
or co-registrar may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for
any statement of the Company or any Subsidiary Guarantor in this Indenture or
in any document
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issued in connection with the sale of the Securities or in the Securities other
than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it is known to a
Trust Officer or written notice of it is received by the Trustee. Except in
the case of a Default in payment of principal of or interest on any Security,
the Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
The Trustee is not required to take notice or deemed to have
notice of any Event of Default with respect to the Securities, except an Event
of Default under Section 6.01(1) or 6.01(2) hereof, unless a Trust Officer
shall have received written notice of such Event of Default from the Company,
any Subsidiary Guarantor or any Securityholder or unless a Trust Officer shall
otherwise have knowledge thereof.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with May 15, 1998, and in any event
prior to July 15 in each year, the Trustee shall mail to each Securityholder a
brief report dated as of May 15 each year that complies with TIA Section
313(a), if and to the extent required by said subsection. The Trustee also
shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall
pay to the Trustee from time to time reasonable compensation for its services.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all
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loss, liability or expense (including attorneys' fees) incurred by it in
connection with the acceptance and administration of this trust and the
performance of its duties hereunder. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee
to so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee may have separate
counsel and the Company shall pay the fees and expenses of such counsel. The
Company need not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee through the Trustee's own wilful misconduct,
negligence or bad faith. The Company need not pay for any settlement made by
the Trustee without the Company's consent, such consent not to be unreasonably
withheld.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of a Default specified in Section 6.01(6) or (7),
the expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign
at any time by so notifying the Company. The Holders of a majority in
aggregate principal amount of the Securities may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee. The Company shall
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in aggregate principal amount of the Securities and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists
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in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in aggregate principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder who has been a bona fide Holder of a Security for at least six
months may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any such successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder
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or in the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Securities
or in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. The Trustee
shall comply with TIA Section 310(b), subject to the penultimate paragraph
thereof; provided, however, that there shall be excluded from the operation of
TIA Section 310(b)(1) any indenture or indentures under which other securities
or certificates of interest or participation in other securities of the Company
are outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities;
Defeasance. (a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07) for
cancelation or (ii) all outstanding Securities have become due and payable,
whether at maturity or as a result of the mailing of a notice of redemption
pursuant to Article 3 and the Company irrevocably deposits with the Trustee
funds sufficient to pay at maturity or upon redemption all outstanding
Securities, including interest thereon to maturity or such redemption date
(other than Securities replaced pursuant to Section 2.07), and if in either
case the Company pays all other sums payable hereunder by the Company, then
this Indenture shall, subject to Sections 8.01(c), cease to be of further
effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance
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option") or (ii) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06,
4.07, 4.08, 4.09, 4.10, 4.13, 4.14 and 4.15, the operation of Sections 6.01(4)
(to the extent relating to such other Sections), 6.01(5), 6.01(6), 6.01(7),
6.01(8) and 6.01(9) (but, in the case of Sections 6.01(6) and (7), with respect
only to Significant Subsidiaries), its obligations under Sections 5.01(iv),
5.01(v) and 5.02 and the related operation of Section 6.01(3) ("covenant
defeasance option"). The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default. If
the Company exercises its covenant defeasance option, payment of the Securities
may not be accelerated because of an Event of Default specified in Sections
6.01(3) and 6.01(4) (with respect to the provisions of Articles 4 and 5 referred
to in the immediately preceding paragraph) and Sections 6.01(5), 6.01(6),
6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections 6.01(6) and (7), with
respect only to Significant Subsidiaries). If the Company exercises its legal
defeasance option or its covenant defeasance option, each Subsidiary Guarantor,
if any, shall be released from all its obligations under its Subsidiary
Guaranty.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.05 and 8.06 and
Appendix A shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07 and 8.05 shall survive.
SECTION 8.02. Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal of
and interest on the Securities to maturity or redemption, as the case
may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments
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of principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will
be sufficient to pay principal and interest when due on all the
Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Section 6.01(6) or (7) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Securityholders will not recognize income, gain or
loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance
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and discharge of the Securities as contemplated by this Article 8 have
been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date
in accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant
to this Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities. Money
and securities so held in trust are not subject to Article 10.
SECTION 8.04. Repayment to Company. The Trustee and the
Paying Agent shall promptly turn over to the Company upon request any excess
money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent
is unable to apply any money or U.S. Government Obligations in accordance with
this Article 8 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 Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities
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to receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent.
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Company and
the Trustee may amend this Indenture or the Securities without notice to or
consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(4) to make any change in Article 10 or Article 12 that would
limit or terminate the benefits available to any holder of Senior
Indebtedness of the Company or any Subsidiary Guarantor (or
Representatives therefor) under Article 10 or Article 12,
respectively;
(5) to add or to remove Subsidiary Guarantors when permitted
by the terms hereof, or to secure the Securities;
(6) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company;
(7) to comply with any requirements of the SEC in connection
with qualifying, or maintaining the qualification of, this Indenture
under the TIA; or
(8) to make any change that does not adversely affect the
rights of any Securityholder.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 or Article 12 of any holder of
Designated Senior Indebtedness then outstanding unless the holders of such
Designated Senior Indebtedness (or their Representative) consent in writing to
such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a
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notice briefly describing such amendment. The failure to give such notice to
all Securityholders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities. However, without the
consent of each Securityholder affected thereby an amendment or waiver may not:
(1) reduce the amount of Securities whose Holders must consent
to an amendment or waiver;
(2) reduce the rate of or change the time for payment of
interest on any Security;
(3) reduce the principal of or extend the Stated Maturity of
any Security;
(4) reduce the amount payable upon the redemption or
repurchase of any Security in accordance with Article 3 or Section
4.06 or 4.09, or change the time at which any Security may be redeemed
in accordance with Article 3;
(5) at any time after a Change of Control or an Asset Sale has
occurred, change the time at which the Change of Control Offer or
Prepayment Offer relating thereto must be made or at which the
Securities must be repurchased pursuant to such Change of Control
Offer or Prepayment Offer;
(6) make any Security payable in a currency other than that
stated in the Security;
(7) make any change in Article 10 or Article 12 that adversely
affects the rights of any Securityholder under Article 10 or Article
12;
(8) make any change in any Subsidiary Guaranty that would
adversely affect the Securityholders;
(9) impair the right of any Holder to institute suit for
enforcement of any payment on or with respect to such Holder's
Securities or any Subsidiary Guaranty;
(10) release any security that may have been granted to the
Trustee in respect of the Securities; or
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(11) make any change in Section 6.04 or 6.07 or the second
sentence of this Section.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 or Article 12 of any holder of
Designated Senior Indebtedness then outstanding unless the holders of such
Designated Senior Indebtedness (or their Representative) consent in writing to
such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers.
A consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Securityholder.
An amendment or waiver becomes effective upon the execution of such amendment
or waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such
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action, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 120 days after
such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder
of the Security to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security regarding the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make
the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if such amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor
any Affiliate of the Company shall, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fee or otherwise, to any
Holder for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this Indenture or the Securities unless such
consideration is offered to be paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating
to such consent, waiver or agreement.
ARTICLE 10
Subordination
SECTION 10.01. Agreement To Subordinate. The Company agrees,
and each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities is subordinated in right of payment, to the extent
and in the manner provided in this Article 10, to the payment when due of all
Senior Indebtedness of the Company and that the subordination is for the
benefit of and
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enforceable by the holders of such Senior Indebtedness. The Securities shall in
all respects rank pari passu with any future Pari Passu Indebtedness of the
Company and senior to any future Subordinated Indebtedness of the Company, and
only Senior Indebtedness of the Company shall rank senior to the Securities in
accordance with the provisions set forth herein. All provisions of this Article
10 shall be subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon
any payment or distribution of the assets of the Company to creditors upon a
total or partial liquidation or a total or partial dissolution of the Company
or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property:
(1) holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full of such Senior Indebtedness before
Securityholders shall be entitled to receive any payment of principal
of or interest on the Securities; and
(2) until such Senior Indebtedness is paid in full, any
distribution made by or on behalf of the Company to which
Securityholders would be entitled but for this Article 10 shall be
made to holders of such Senior Indebtedness as their interests may
appear, except that all Securityholders may receive and retain shares
of stock and any debt securities that are subordinated to all Senior
Indebtedness of the Company to at least the same extent as the
Securities.
SECTION 10.03. Default on Senior Indebtedness. The Company
may not pay the principal of or interest on the Securities or make any deposit
pursuant to Section 8.01 and may not repurchase, redeem or otherwise retire any
Securities (collectively, "pay the Securities") if (i) any principal, interest
or other amounts due in respect of any Senior Indebtedness of the Company is
not paid within any applicable grace period (including at maturity) or (ii) any
other default on Senior Indebtedness of the Company occurs and the maturity of
such Senior Indebtedness is accelerated in accordance with its terms unless, in
either case, (x) the default has been cured or waived and any such acceleration
has been rescinded or (y) such Senior Indebtedness has been paid in full;
provided, however, that the Company may pay the Securities without regard to
the foregoing if the Company and the Trustee receive written notice approving
such payment from the Representative of each issue of Designated Senior
Indebtedness. During the continuance of any default (other than a default
described in clause (i) or
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(ii) of the preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration), the Company may not pay the Securities for a period
(a "Payment Blockage Period") commencing upon the receipt by the Company and the
Trustee of written notice of such default from the Representative of the holders
of such Designated Senior Indebtedness specifying an election to effect a
Payment Blockage Period (a "Payment Blockage Notice") and ending 179 days after
receipt of such notice by the Company and the Trustee unless earlier terminated
(i) by written notice to the Trustee and the Company from the Representative who
gave such Payment Blockage Notice, (ii) because such Designated Senior
Indebtedness has been repaid in full or (iii) because the default giving rise to
such Payment Blockage Notice is no longer continuing. Notwithstanding the
provisions described in the immediately preceding sentence, unless the holders
of such Designated Senior Indebtedness or the Representative of such holders
shall have accelerated the maturity of such Designated Senior Indebtedness and
not rescinded such acceleration, the Company may (unless otherwise prohibited as
described in the first sentence of this paragraph) resume payments on the
Securities after such Payment Blockage Period. No more than one Payment
Blockage Notice may be given in any consecutive 360-day period regardless of the
number of defaults with respect to one or more issues of Senior Indebtedness.
SECTION 10.04. Acceleration of Payment of Securities. If
payment of the Securities is accelerated because of an Event of Default, the
Company or the Trustee shall promptly notify the holders of the Designated
Senior Indebtedness (or their Representatives) of the acceleration.
SECTION 10.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article 10 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness of the Company and
pay it over to them as their interests may appear.
SECTION 10.06. Subrogation. After all Senior Indebtedness of
the Company is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness.
A distribution made under this Article 10 to holders of such Senior
Indebtedness which otherwise
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would have been made to Securityholders is not, as between the Company and
Securityholders, a payment by the Company on such Senior Indebtedness.
SECTION 10.07. Relative Rights. This Article 10 defines the
relative rights of Securityholders and holders of Senior Indebtedness of the
Company. Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default or an Event of Default, subject
to the rights of holders of Senior Indebtedness of the Company to
receive distributions otherwise payable to Securityholders.
SECTION 10.08. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Indebtedness of the Company to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Indenture.
SECTION 10.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 10.03, the Trustee or Paying Agent may continue to make
payments on the Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer receives notice satisfactory to it that payments may not be made under
this Article 10. The Company, the Registrar or co-registrar, the Paying Agent,
a Representative or a holder of Senior Indebtedness may give the notice;
provided, however, that, if an issue of Senior Indebtedness of the Company has
a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness of the Company with the same rights it would have if it
were not Trustee. The Registrar and co-registrar and the Paying Agent may do
the same with like rights. The Trustee shall be entitled to all the rights set
forth in this Article 10 with respect to any Senior Indebtedness of the Company
which may at any time be held by it, to the same extent as any other holder of
such Senior Indebtedness; and nothing in Article 7 shall deprive
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the Trustee of any of its rights as such holder. Nothing in this Article 10
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.07.
SECTION 10.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness of the Company, the distribution may be made and the notice given
to their Representative (if any).
SECTION 10.11. Article 10 Not To Prevent Events of Default or
Limit Right To Accelerate. The failure to make a payment pursuant to the
Securities by reason of any provision in this Article 10 shall not be construed
as preventing the occurrence of a Default. Nothing in this Article 10 shall
have any effect on the right of the Securityholders or the Trustee to
accelerate the maturity of the Securities.
SECTION 10.12. Trust Moneys Not Subordinated.
Notwithstanding anything contained herein to the contrary, payments from money
or the proceeds of U.S. Government Obligations held in trust under Article 8 by
the Trustee for the payment of principal of and interest on the Securities
shall not be subordinated to the prior payment of any Senior Indebtedness or
subject to the restrictions set forth in this Article 10, and none of the
Securityholders shall be obligated to pay over any such amount to the Company
or any holder of Senior Indebtedness of the Company or any other creditor of
the Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section
10.02 are pending, (ii) upon a certificate of the liquidating trustee or agent
or other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness of the Company for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of such
Senior Indebtedness 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. In the event that the
Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness of the Company to
participate in any payment or distribution pursuant to this Article 10, the
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Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and other facts pertinent to the rights of such Person
under this Article 10, and, if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment. The provisions of Sections 7.01 and
7.02 shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article 10.
SECTION 10.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Securityholders and the
holders of Senior Indebtedness of the Company as provided in this Article 10
and appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if
it shall mistakenly pay over or distribute to Securityholders or the Company or
any other Person, money or assets to which any holders of Senior Indebtedness
of the Company shall be entitled by virtue of this Article 10 or otherwise.
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness of the Company, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Securities, to acquire
and continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of such Senior Indebtedness shall be deemed conclusively to have relied
on such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.
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ARTICLE 11
Subsidiary Guaranties
SECTION 11.01. Guaranties. Each Subsidiary Guarantor hereby
unconditionally guarantees, jointly and severally, to each Holder and to the
Trustee and its successors and assigns (a) the full and punctual payment of
principal of and interest on the Securities when due, whether at maturity, by
acceleration, by redemption or otherwise, and all other monetary obligations of
the Company under this Indenture and the Securities and (b) the full and
punctual performance within applicable grace periods of all other obligations
of the Company under this Indenture and the Securities (all the foregoing being
hereinafter collectively called the "Obligations"). Each Subsidiary Guarantor
further agrees that the Obligations may be extended or renewed, in whole or in
part, without notice or further assent from such Subsidiary Guarantor and that
such Subsidiary Guarantor will remain bound under this Article 11
notwithstanding any extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives
notice of any default under the Securities or the Obligations. The obligations
of each Subsidiary Guarantor hereunder shall not be affected by (a) the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
right or remedy against the Company or any other Person under this Indenture,
the Securities or any other agreement or otherwise; (b) any extension or
renewal of any thereof; (c) any rescission, waiver, amendment or modification
of any of the terms or provisions of this Indenture, the Securities or any
other agreement; (d) the release of any security held by any Holder or the
Trustee for the Obligations or any of them; (e) the failure of any Holder or
the Trustee to exercise any right or remedy against any other guarantor of the
Obligations; or (f) any change in the ownership of such Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Obligations.
Each Subsidiary Guaranty is, to the extent and in the manner
set forth in Article 12, subordinated and subject
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in right of payment to the prior payment in full of all Senior Indebtedness of
the Subsidiary Guarantor giving such Subsidiary Guaranty and each Subsidiary
Guaranty is made subject to such provisions of this Indenture.
Except as expressly set forth in Sections 4.08, 4.15, 5.02 and
8.01(b), the obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Subsidiary Guarantor herein
shall not be discharged or impaired or otherwise affected by the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any remedy
under this Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of principal of or
interest on any Obligation is rescinded or must otherwise be restored by any
Holder or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Obligation when and as the same shall
become due, whether at maturity, by acceleration, by redemption or otherwise,
or to perform or comply with any other Obligation, each Subsidiary Guarantor
hereby promises to and will, upon receipt of written demand by the Trustee,
forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an
amount equal to the sum of (i) the unpaid amount of such Obligations, (ii)
accrued and unpaid interest on such Obligations (but only to the extent not
prohibited by law) and (iii) all other monetary Obligations of the Company to
the Holders and the Trustee.
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Each Subsidiary Guarantor agrees that it shall not be entitled
to any right of subrogation in respect of any Obligations guaranteed hereby
until payment in full in cash of all Obligations and all obligations to which
the Obligations are subordinated as provided in Article 12. Each Subsidiary
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Obligations
guaranteed hereby may be accelerated as provided in Article 6 for the purposes
of such Subsidiary Guarantor's Subsidiary Guaranty herein, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6, such Obligations
(whether or not due and payable) shall forthwith become due and payable by such
Subsidiary Guarantor for the purposes of this Section.
Each Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
any Holder in enforcing any rights under this Section.
SECTION 11.02. Contribution. Each of the Company and any
Subsidiary Guarantor (a "Contributing Party") agrees (subject to Articles 10
and 12) that, in the event a payment shall be made by any other Subsidiary
Guarantor under any Subsidiary Guaranty (the "Claiming Guarantor"), the
Contributing Party shall indemnify the Claiming Guarantor in an amount equal to
the amount of such payment multiplied by a fraction, the numerator of which
shall be the net worth of the Contributing Party on the date hereof and the
denominator of which shall be the aggregate net worth of the Company and all
the Subsidiary Guarantors on the date hereof (or, in the case of any Subsidiary
Guarantor becoming a party hereto pursuant to Section 9.01, the date of the
amendment hereto executed and delivered by such Subsidiary Guarantor).
SECTION 11.03. Successors and Assigns. This Article 11 shall
be binding upon each Subsidiary Guarantor and its successors and assigns and
shall enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
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SECTION 11.04. No Waiver. Neither a failure nor a delay on
the part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 11 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of
any right, power or privilege. The rights, remedies and benefits of the
Trustee and the Holders herein expressly specified are cumulative and not
exclusive of any other rights, remedies or benefits which either may have under
this Article 11 at law, in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or
waiver of any provision of this Article 11, nor the consent to any departure by
any Subsidiary Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given. No notice to or demand on any Subsidiary Guarantor in any
case shall entitle such Subsidiary Guarantor to any other or further notice or
demand in the same, similar or other circumstances.
SECTION 11.06. Execution of Supplemental Indenture for Future
Subsidiary Guarantors. Each Subsidiary which is required to become a Subsidiary
Guarantor pursuant to Section 4.13 shall promptly execute and deliver to the
Trustee a supplemental indenture in the form of Exhibit B hereto pursuant to
which such Subsidiary shall become a Subsidiary Guarantor under this Article 11
and shall guarantee the Obligations. Concurrently with the execution and
delivery of such supplemental indenture, the Company shall deliver to the
Trustee an Opinion of Counsel to the effect that such supplemental indenture has
been duly authorized, executed and delivered by such Subsidiary and that,
subject to the application of bankruptcy, insolvency, moratorium, fraudulent
conveyance or transfer and other similar laws relating to creditors' rights
generally and to the principles of equity, whether considered in a proceeding at
law or in equity, the Subsidiary Guaranty of such Subsidiary Guarantor is a
legal, valid and binding obligation of such Subsidiary Guarantor, enforceable
against such Subsidiary Guarantor in accordance with its terms.
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ARTICLE 12
Subordination of Subsidiary Guaranties
SECTION 12.01. Agreement To Subordinate. Each Subsidiary
Guarantor agrees, and each Securityholder by accepting a Security agrees, that
the Obligations of such Subsidiary Guarantor are subordinated in right of
payment, to the extent and in the manner provided in this Article 12, to the
payment when due of all Senior Indebtedness of such Subsidiary Guarantor and
that the subordination is for the benefit of and enforceable by the holders of
such Senior Indebtedness. The Obligations of a Subsidiary Guarantor shall in
all respects rank pari passu with any future Pari Passu Indebtedness of such
Subsidiary Guarantor and senior to any future Subordinated Indebtedness of such
Subsidiary Guarantor, and only Senior Indebtedness of such Subsidiary Guarantor
(including such Subsidiary Guarantor's Guarantee of Senior Indebtedness of the
Company) shall rank senior to the Obligations of such Subsidiary Guarantor in
accordance with the provisions set forth herein.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon
any payment or distribution of the assets of any Subsidiary Guarantor to
creditors upon a total or partial liquidation or a total or partial dissolution
of such Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Subsidiary Guarantor or its
property:
(1) holders of Senior Indebtedness of such Subsidiary
Guarantor shall be entitled to receive payment in full of such Senior
Indebtedness before Securityholders shall be entitled to receive any
payment pursuant to any Obligations of such Subsidiary Guarantor; and
(2) until the Senior Indebtedness of any Subsidiary Guarantor
is paid in full, any distribution made by or on behalf of such
Subsidiary Guarantor to which Securityholders would be entitled but
for this Article 12 shall be made to holders of such Senior
Indebtedness as their interests may appear, except that
Securityholders may receive shares of stock and any debt securities of
such Subsidiary Guarantor that are subordinated to Senior Indebtedness
of such Subsidiary Guarantor to at least the same extent as the
Obligations of such Subsidiary Guarantor are subordinated to Senior
Indebtedness of such Subsidiary Guarantor.
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SECTION 12.03. Default on Senior Indebtedness of Subsidiary
Guarantor. No Subsidiary Guarantor may make any payment pursuant to any of its
Obligations or repurchase, redeem or otherwise retire or defease any Securities
or other Obligations (collectively, "pay its Subsidiary Guaranty") if (i) any
Senior Indebtedness of such Subsidiary Guarantor is not paid within any
applicable grace period (including at maturity) or (ii) any other default on
Senior Indebtedness of such Subsidiary Guarantor occurs and the maturity of
such Senior Indebtedness is accelerated in accordance with its terms unless, in
either case, (x) the default has been cured or waived and any such acceleration
has been rescinded or (y) such Senior Indebtedness has been paid in full;
provided, however, that any Subsidiary Guarantor may pay its Subsidiary
Guaranty without regard to the foregoing if such Subsidiary Guarantor and the
Trustee receive written notice approving such payment from the Representatives
of each issue of Senior Indebtedness of such Subsidiary Guarantor. No
Subsidiary Guarantor may pay its Subsidiary Guaranty during the continuance of
any Payment Blockage Period after receipt by the Company and the Trustee of a
Payment Blockage Notice under Section 10.03. Notwithstanding the provisions
described in the immediately preceding sentence, unless the holders of
Designated Senior Indebtedness giving such Payment Blockage Notice or the
Representative of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness and not rescinded such acceleration, any
Subsidiary Guarantor may resume (unless otherwise prohibited as described in
the first sentence of this paragraph) payments pursuant to its Subsidiary
Guaranty after such Payment Blockage Period.
SECTION 12.04. Demand for Payment. If a demand for payment
is made on a Subsidiary Guarantor pursuant to Article 11, the Trustee shall
promptly notify the holders of the Designated Senior Indebtedness (or their
Representatives) of such demand.
SECTION 12.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article 12 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of the relevant Senior Indebtedness and pay
it over to them or their Representatives as their interests may appear.
SECTION 12.06. Subrogation. After all Senior Indebtedness of
a Subsidiary Guarantor is paid in full and until the Securities are paid in
full, Securityholders shall be subrogated to the rights of holders of such
Senior Indebtedness to receive distributions applicable to such
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Senior Indebtedness. A distribution made under this Article 12 to holders of
such Senior Indebtedness which otherwise would have been made to Securityholders
is not, as between the relevant Subsidiary Guarantor and Securityholders, a
payment by such Subsidiary Guarantor on such Senior Indebtedness.
SECTION 12.07. Relative Rights. This Article 12 defines the
relative rights of Securityholders and holders of Senior Indebtedness of a
Subsidiary Guarantor. Nothing in this Indenture shall:
(1) impair, as between a Subsidiary Guarantor and
Securityholders, the obligation of such Subsidiary Guarantor, which is
absolute and unconditional, to pay the Obligations to the extent set
forth in Article 11 or the relevant Subsidiary Guaranty; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a default by such Subsidiary Guarantor
under the Obligations, subject to the rights of holders of Senior
Indebtedness of such Subsidiary Guarantor to receive distributions
otherwise payable to Securityholders.
SECTION 12.08. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Indebtedness of any Subsidiary Guarantor to
enforce the subordination of the Obligations of such Subsidiary Guarantor shall
be impaired by any act or failure to act by such Subsidiary Guarantor or by its
failure to comply with this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 12.03, the Trustee or Paying Agent may continue to make
payments on any Subsidiary Guaranty and shall not be charged with knowledge of
the existence of facts that would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of such payment, a
Trust Officer receives written notice satisfactory to it that payments may not
be made under this Article 12. The Company, the relevant Subsidiary Guarantor,
the Registrar or co-registrar, the Paying Agent, a Representative or a holder of
Senior Indebtedness of any Subsidiary Guarantor may give the notice; provided,
however, that, if an issue of Senior Indebtedness of any Subsidiary Guarantor
has a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not the
Trustee. The Registrar and
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co-registrar and the Paying Agent may do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this Article 12 with respect to
any Senior Indebtedness of any Subsidiary Guarantor which may at any time be
held by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 12 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.07.
SECTION 12.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness of any Subsidiary Guarantor, the distribution may be made and the
notice given to their Representative (if any).
SECTION 12.11. Article 12 Not To Prevent Defaults Under a
Subsidiary Guaranty or Limit Right To Demand Payment. The failure to make a
payment pursuant to a Subsidiary Guaranty by reason of any provision in this
Article 12 shall not be construed as preventing the occurrence of a default
under such Subsidiary Guaranty. Nothing in this Article 12 shall have any
effect on the right of the Securityholders or the Trustee to make a demand for
payment on any Subsidiary Guarantor pursuant to Article 11 or the relevant
Subsidiary Guaranty.
SECTION 12.12. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness of any Subsidiary Guarantor for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
such Senior Indebtedness and other indebtedness of such Subsidiary Guarantor,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 12. In the
event that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness of any
Subsidiary Guarantor to participate in any payment or distribution pursuant to
this Article 12, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
of such Subsidiary Guarantor held by such Person, the extent to which such
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Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article 12, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 12.
SECTION 12.13. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness of any Subsidiary Guarantor as provided in this Article 12
and appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness of Subsidiary Guarantor. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness of any Subsidiary
Guarantor and shall not be liable to any such holders if it shall mistakenly
pay over or distribute to Securityholders or the Company or any other Person,
money or assets to which any holders of such Senior Indebtedness shall be
entitled by virtue of this Article 12 or otherwise.
SECTION 12.15. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness of any Subsidiary Guarantor, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Securities, to acquire
and continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of Senior Indebtedness shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.
ARTICLE 13
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls. If any
provision of this Indenture limits, qualifies or conflicts with another
provision which is required to be
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included in this Indenture by the TIA, the required provision shall control.
SECTION 13.02. Notices. Any notice or communication shall be
in writing and delivered in person or mailed by first-class mail or sent by
facsimile (with a hard copy delivered in person or by mail promptly thereafter)
and addressed as follows:
if to the Company or any Subsidiary Guarantor:
Stone Energy Corporation
000 X. Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Telecopy No: (000)000-0000
Attention: Xxxxxx X. Xxxxx, III
if to the Trustee:
(1) for payment, registration, transfer, exchange and tender
of the Securities:
By Hand:
Texas Commerce Bank National Association
Attention: Registered Bond Events
One Main Place
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
By Mail:
Texas Commerce Bank National Association
Attention: Registered Bond Events
X.X. Xxx 0000
Xxxxxx, Xxxxx 00000-0000
Telephone No: (000)000-0000 or (000)000-0000
(2) for all other communications relating to the Securities:
Texas Commerce Bank National Association
Attention: Global Trust Services
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telephone No: (000)000-0000
Telecopy No: (000)000-0000
The Company or any Subsidiary Guarantor, on the one hand, or
the Trustee, on the other hand, by notice to
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the other may designate additional or different addresses for subsequent notices
or communications.
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears
on the registration books of the Registrar and shall be sufficiently given if
so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. Notices shall be effective only upon receipt.
SECTION 13.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
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(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. When Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at
the time shall be considered in any such determination.
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, the Paying Agent and any co-registrar may make
reasonable rules for their functions.
SECTION 13.08. Legal Holidays. A "Legal Holiday" is a
Saturday, a Sunday or a day on which banking institutions are not required to
be open in the State of Texas. If a payment date is a Legal Holiday, payment
shall be made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If a regular record date is
a Legal Holiday, the record date shall not be affected.
SECTION 13.09. Governing Law. THIS INDENTURE AND THE
SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 13.10. No Recourse Against Others. A director,
officer, employee or stockholder, as such, of the Company or any Subsidiary
Guarantor shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in
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respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder shall waive and release all such liability. The
waiver and release shall be part of the consideration for the issue of the
Securities.
SECTION 13.11. Successors. All agreements of the Company and
any Subsidiary Guarantors in this Indenture and the Securities shall bind their
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 13.12. Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough
to prove this Indenture.
SECTION 13.13. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
STONE ENERGY CORPORATION,
by /s/ XXXX XXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee,
by /s/ XXXXX XXXXX
-------------------------------------
Name: XXXXX X. XXXXX
Title: Vice President and Trust Officer
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APPENDIX A
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO RULE 144A, TO
CERTAIN PERSONS IN OFFSHORE TRANSACTIONS IN RELIANCE ON REGULATION S AND,
SUBJECT TO THE APPLICABLE PURCHASE AGREEMENT, TO INSTITUTIONAL ACCREDITED
INVESTORS.
PROVISIONS RELATING TO INITIAL SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Definitive Security" means a certificated Initial Security or
Exchange Security bearing, if required, the restricted securities legend set
forth in Section 2.3(d).
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Exchange Securities" means the 83/4% Senior Subordinated
Notes due 2007 to be issued pursuant to this Indenture in connection with a
Registered Exchange Offer or a Private Exchange pursuant to a Registration
Agreement.
"IAI" means an institutional "accredited investor" as
described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Salomon Brothers Inc; Credit Suisse
First Boston Corporation; Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated;
Xxxxxx Xxxxxxx & Co. Incorporated; and NationsBanc Capital Markets, Inc.
"Initial Securities" means the 83/4% Senior Subordinated Notes
due 2007, to be issued from time to time, in one or more series as provided for
in this Indenture.
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"Original Securities" means Initial Securities in the
aggregate principal amount of $100,000,000 issued on September 19, 1997.
"Private Exchange" means the offer by the Company, pursuant to
Section 2(f) of the Registration Agreement dated September 16, 1997, or
pursuant to any similar provision of any other Registration Agreement, to issue
and deliver to certain purchasers, in exchange for the Initial Securities held
by such purchasers as part of their initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means the 83/4% Senior
Subordinated Notes due 2007 to be issued pursuant to this Indenture in
connection with a Private Exchange pursuant to a Registration Agreement
"Purchase Agreement" means the Purchase Agreement dated
September 16, 1997, between the Company and the Initial Purchasers relating to
the Original Securities, or any similar agreement relating to any future sale
of Initial Securities by the Company.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to a Registration Agreement, to certain Holders of Initial Securities,
to issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Agreement" means the Registration Agreement
dated September 16, 1997, between the Company and the Initial Purchasers
relating to the Original Securities, or any similar agreement relating to any
additional Initial Securities.
"Securities" means the Initial Securities and the Exchange
Securities, treated as a single class.
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"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor person
thereto who shall initially be the Trustee.
"Shelf Registration Statement" means a registration statement
issued by the Company in connection with the offer and sale of Initial
Securities pursuant to a Registration Agreement.
"Transfer Restricted Securities" means Definitive Securities
and any other Securities that bear or are required to bear the legend set forth
in Section 2.3(d) hereto.
1.2 Other Definitions
Defined in
----------
Term Section:
---- -------
"Agent Members" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
"Global Security" . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
"Regulation S" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Rule 144A" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
2. The Securities
2.1 Form and Dating
The Initial Securities will be offered and sold by the
Company, from time to time, pursuant to one or more Purchase Agreements. The
Initial Securities will be resold, initially only to QIBs in reliance on Rule
144A under the Securities Act ("Rule 144A"), in reliance on Regulation S under
the Securities Act ("Regulation S") and, subject to the terms of the applicable
Purchase Agreement, to IAIs under Rule 501(a)(1),(2),(3) or (7) under the
Securities Act. Initial Securities may thereafter be transferred to, among
others, QIBs, purchasers in reliance on Regulation S and IAIs.
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(a) Global Securities. Initial Securities shall be issued
initially in the form of one or more permanent global Securities in definitive,
fully registered form without interest coupons with the global securities
legend and restricted securities legend set forth in Exhibit 1 hereto (each, a
"Global Security"), which shall be deposited on behalf of the purchasers of the
Initial Securities represented thereby with the Securities Custodian, and
registered in the name of the Depository or a nominee of the Depository, duly
executed by the Company and authenticated by the Trustee as provided in this
Indenture. The aggregate principal amount of the Global Securities may from
time to time be increased or decreased by adjustments made on the records of
the Trustee and the Depository or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b) and pursuant to an order of the Company, authenticate
and deliver initially one or more Global Securities that (a) shall be
registered in the name of the Depository for such Global Security or Global
Securities or the nominee of such Depository and (b) shall be delivered by the
Trustee to such Depository or pursuant to such Depository's instructions or
held by the Trustee as Securities Custodian.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as Securities
Custodian or under such Global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such
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Depository governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
(c) Definitive Securities. Except as provided in Section 2.3
or 2.4, owners of beneficial interests in Global Securities will not be
entitled to receive physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
Original Securities for original issue in an aggregate principal amount of
$100,000,000, (2) additional Initial Securities, if and when issued, in an
aggregate principal amount of up to $50,000,000 and (3) Exchange Securities for
issue only in a Registered Exchange Offer or a Private Exchange pursuant to a
Registration Agreement, for a like principal amount of Initial Securities, upon
a written order of the Company signed by two Officers or by an Officer and
either an Assistant Treasurer or an Assistant Secretary of the Company. Such
order shall specify the amount of the Securities to be authenticated and the
date on which the original issue of Securities is to be authenticated and
whether the Securities are to be Initial Securities or Exchange Securities. The
aggregate principal amount of Securities outstanding at any time may not exceed
$150,000,000, except as provided in Section 2.08 of this Indenture.
Notwithstanding anything to the contrary in this Appendix or otherwise in this
Indenture, any additional issuance of Securities after the Issue Date shall be
in a principal amount of at least $25,000,000, whether such additional
Securities are of the same or a different series than the Original Securities.
2.3 Transfer and Exchange. (a) Transfer and Exchange of
Definitive Securities. When Definitive Securities are presented to the
Registrar or a co-registrar with a request:
(x) to register the transfer of such Definitive Securities;
or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized
denominations,
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the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Registrar or co-registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(ii) are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act, pursuant to
Section 2.3(b) or pursuant to clause (A), (B) or (C) below, and are
accompanied by the following additional information and documents, as
applicable:
(A) if such Definitive Securities are being
delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification from
such Holder to that effect; or
(B) if such Definitive Securities are being
transferred to the Company, a certification to that effect; or
(C) if such Definitive Securities are being
transferred pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act, (i) a
certification to that effect and (ii) if the Company so
requests, an opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the restrictions
set forth in the legend set forth in Section 2.3(d)(i).
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee
of a
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Definitive Security, duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar or
co-registrar, together with:
(i) certification that such Definitive Security is being
transferred (A) to a QIB in accordance with Rule 144A, (B) to an IAI
that has furnished to the Trustee a signed letter or (C) outside the
United States in an offshore transaction within the meaning of
Regulation S and in compliance with Rule 904 under the Securities Act;
and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books
and records with respect to such Global Security to reflect an
increase in the aggregate principal amount of the Securities
represented by the Global Security, such instructions to contain
information regarding the Depositary account to be credited with such
increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Definitive Security so canceled. If no
Global Securities are then outstanding and the Global Security has not been
previously exchanged pursuant to Section 2.4, the Company shall issue and the
Trustee shall authenticate, upon written order of the Company in the form of an
Officers' Certificate, a new Global Security in the appropriate principal
amount.
(c) Transfer and Exchange of Global Securities. (i) The
transfer and exchange of Global Securities or beneficial interests therein
shall be effected through the
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Depository, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depository therefor. A transferor of a beneficial interest in a Global
Security shall deliver a written order given in accordance with the
Depository's procedures containing information regarding the participant
account of the Depository to be credited with a beneficial interest in the
Global Security and such account shall be credited in accordance with such
instructions with a beneficial interest in the Global Security and the account
of the Person making the transfer shall be debited by an amount equal to the
beneficial interest in the Global Security being transferred. In the case of a
transfer of a beneficial interest in a Global Security to an IAI, the
transferee must furnish a signed letter to the Trustee containing certain
representations and agreements (the form of which letter can be obtained from
the Trustee or the Company).
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another
Global Security, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the Global
Security to which such interest is being transferred in an amount
equal to the principal amount of the interest to be so transferred,
and the Registrar shall reflect on its books and records the date and
a corresponding decrease in the principal amount of Global Security
from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix A
(other than the provisions set forth in Section 2.4), a Global
Security may not be transferred as a whole except by the Depository to
a nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository
or any such nominee to a successor Depository or a nominee of such
successor Depository.
(iv) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 prior
to the consummation of a Registered
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Exchange Offer or the effectiveness of a Shelf Registration Statement
with respect to such Securities, such Securities may be exchanged only
in accordance with such procedures as are substantially consistent
with the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Securities
intended to ensure that such transfers comply with Rule 144A,
Regulation S or such other applicable exemption from registration
under the Securities Act, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(d) Legend.
(i) Except as permitted by the following paragraphs (ii),
(iii), (iv) and (vi), each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities issued in
exchange therefor or in substitution thereof) shall bear a legend in
substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT
THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X)
PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR A
PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN
AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING
THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY),
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10
(3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER
THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR
ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4)
TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE WHICH
MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (5) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS
SECURITY AGREES IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH
CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO
CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT
IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT
IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH
(o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT."
Each Definitive Security will also bear the following
additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER
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11
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act:
(A) in the case of any Transfer Restricted Security
that is a Definitive Security, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security
for a Definitive Security that does not bear the legends set
forth above and rescind any restriction on the transfer of
such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security
that is represented by a Global Security, the Registrar shall
permit the Holder thereof to exchange such Transfer Restricted
Security for a Definitive Security that does not bear the
legends set forth above and rescind any restriction on the
transfer of such Transfer Restricted Security,
in either case, if the Holder certifies in writing to the Registrar that its
request for such exchange was made in reliance on Rule 144 (such certification
to be in the form set forth on the reverse of the Initial Security).
(iii) After a transfer of any Initial Securities during the
period of the effectiveness of a Shelf Registration Statement with
respect to such Initial Securities, all requirements pertaining to
legends on such Initial Security will cease to apply, the requirements
requiring that any such Initial Security be issued in global form will
cease to apply, and an Initial Security in certificated or global form
without legends will be available to the transferee of the Holder of
such Initial Securities upon exchange of such transferring Holder's
certificated Initial Security. Upon the occurrence of any of the
circumstances described in this paragraph, the Company will deliver an
Officers'
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12
Certificate to the Trustee instructing the Trustee to issue Securities
without legends.
(iv) Upon the consummation of a Registered Exchange Offer
with respect to the Initial Securities pursuant to which certain
Holders of such Initial Securities are offered Exchange Securities in
exchange for their Initial Securities, all requirements pertaining to
such Initial Securities that Initial Securities be issued in global
form will cease to apply, and certificated Initial Securities with the
restricted securities legend set forth in Exhibit 1 hereto will be
available to Holders of such Initial Securities that do not exchange
their Initial Securities, and Exchange Securities in certificated or
global form will be available to Holders that exchange such Initial
Securities in such Registered Exchange Offer. Upon the occurrence of
any of the circumstances described in this paragraph, the Company will
deliver an Officers' Certificate to the Trustee instructing the
Trustee to issue Securities without legends.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities pursuant to which Holders of such Initial
Securities are offered Private Exchange Securities in exchange for
their Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued
in global form will continue to apply, and Private Exchange Securities
in global form will be available to Holders that exchange such Initial
Securities in such Private Exchange.
(vi) Upon a sale or transfer of any Initial Security acquired
pursuant to Regulation S, all requirements pertaining to legends on
such Initial Security will cease to apply, the requirements requiring
any such Initial Security be issued in global form will cease to
apply, and an Initial Security in certificated or global form without
the Restricted Security Legend will be available to the transferee of
the Holder of such Initial Securities.
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13
(e) Cancelation or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been
exchanged for certificated or Definitive Securities, redeemed, repurchased or
canceled, such Global Security shall be returned by the Depository to the
Trustee for cancelation or retained and canceled by the Trustee. At any time
prior to such cancelation, if any beneficial interest in a Global Security is
exchanged for certificated or Definitive Securities, redeemed, repurchased or
canceled, the principal amount of Securities represented by such Global
Security shall be reduced and an adjustment shall be made on the books and
records of the Trustee (if it is then the Securities Custodian for such Global
Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.
(f) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate certificated
Securities, Definitive Securities and Global Securities at the
Registrar's or co-registrar's request.
(ii) No service charge shall be made for any registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge
payable upon exchange or transfer pursuant to Section 3.06, 4.06, 4.09
and 9.05).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period
beginning 15 days before the mailing of a notice of redemption or an
offer to repurchase Securities or 15 days before an interest payment
date.
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14
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a
participant in the Depository or any other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository)
of any notice (including any notice of redemption or repurchase) or
the payment of any amount, under or with respect to such Securities.
All notices and communications to be given to the Holders and all
payments to be made to Holders under the Securities shall be given or
made only to the registered Holders (which shall be the Depository or
its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only
through the Depository subject to the applicable rules and procedures
of the Depository. The Trustee may rely and shall be fully protected
in relying upon information furnished by the Depository with respect
to its members, participants and any beneficial owners.
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(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with
respect to any transfer of any interest in any Security (including any
transfers between or among Depository participants, members or
beneficial owners in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as
are expressly required by, and to do so if and when expressly required
by, the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements
hereof.
2.4 Certificated Securities
(a) A Global Security deposited with the Depository or
with the Trustee as Securities Custodian pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depository notifies the Company
that it is unwilling or unable to continue as a Depository for such Global
Security or if at any time the Depository ceases to be a "clearing agency"
registered under the Exchange Act, and a successor depositary is not appointed
by the Company within 90 days of such notice, or (ii) an Event of Default has
occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the
beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by
the Depository to the Trustee, to be so transferred, in whole or from time to
time in part, without charge, and the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Security, an equal aggregate
principal amount of certificated Securities of authorized denominations. Any
portion of a Global Security transferred pursuant to this Section shall be
executed,
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16
authenticated and delivered only in denominations of $1,000 and any integral
multiple thereof and registered in such names as the Depository shall direct.
Any certificated Initial Security delivered in exchange for an interest in the
Global Security shall, except as otherwise provided by Section 2.3(d), bear the
restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Security may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.
122
EXHIBIT 1
to APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE,
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2
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED
BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE
REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4)
TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND A CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR THE
TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (5)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES IT
WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT
OF THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF,
BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE
COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING
THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A
NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT
SATISFYING THE REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S
UNDER THE SECURITIES ACT.
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.]
124
[FORM OF FACE OF SECURITY]
No. $__________
83/4% Senior Subordinated Note due 2007
CUSIP No. ______
Stone Energy Corporation, a Delaware corporation, promises to
pay to , or registered assigns, the principal sum of
Dollars on September 15, 2007.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
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2
Additional provisions of this Security are set forth on the
other side of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to
be duly executed.
STONE ENERGY CORPORATION,
by
-----------------------------------
Name:
Title:
by
-----------------------------------
Name:
Title:
[CORPORATE SEAL]
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:_________________________
Authorized Signatory
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[FORM OF REVERSE SIDE OF SECURITY]
83/4% Senior Subordinated Note due 2007
1. Interest
(a) Stone Energy Corporation, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on
the principal amount of this Security at the rate per annum shown above. The
Company will pay interest semiannually on March 15 and September 15 of each
year. Interest on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from [ ].
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne
by the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
(b) Special Interest. The holder of this Security is entitled
to the benefits of a Registration Agreement, dated as of [ ], among
the Company and the Purchasers named therein (the "Registration Agreement").
Capitalized terms used in this paragraph (b) but not defined herein have the
meanings assigned to them in the Registration Agreement. [In the event that
(i) neither the Exchange Offer Registration Statement nor the Shelf
Registration Statement has been filed with the Commission on or prior to the
60th day following the date of the original issuance of the Securities, (ii)
neither the Exchange Offer Registration Statement nor the Shelf Registration
Statement has been declared effective on or prior to the 120th day following
the date of the original issuance of the Securities, (iii) neither the
Registered Exchange Offer has been consummated nor the Shelf Registration
Statement has been declared effective on or prior to the 150th day following
the date of the original issuance of the Securities, or (iv) after the Shelf
Registration Statement has been declared effective, such Registration Statement
thereafter ceases to be effective or usable in connection with resales of the
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4
Securities at any time that the Company is obligated to maintain the
effectiveness thereof pursuant to the Registration Agreement (each such event
referred to in clauses (i) through (iv) above being referred to herein as a
"Registration Default"), interest (the "Special Interest") shall accrue (in
addition to stated interest on the Securities) from and including the date on
which the first such Registration Default shall occur to but excluding the date
on which all Registration Defaults have been cured, at a rate per annum equal
to 0.50% of the principal amount of the Securities; provided, however, that
such rate per annum shall increase by 0.25% per annum from and including the
91st day after the first such Registration Default (and each successive 91st
day thereafter) unless and until all Registration Defaults have been cured;
provided further, however, that in no event shall the Special Interest accrue
at a rate in excess of 1.50% per annum. The Special Interest will be payable
in cash semiannually in arrears each March 15 and September 15.] 1/
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the March 1 or September 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States of America that at the time of payment
is legal tender for payment of public and private debts. Payments in respect
of the Securities represented by a Global Security (including principal,
premium and interest) will be made by wire transfer of immediately available
funds to the accounts specified by The Depository Trust Company. The Company
will make all payments in respect of a certificated Security (including
principal, premium and interest), by mailing a check to the registered address
of each Holder thereof;
__________________________________
1Modify as necessary to conform to applicable Registration Agreement.
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5
provided, however, that payments on the Securities may also be made, in the
case of a Holder of at least $1,000,000 aggregate principal amount of
Securities, by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire transfer
by giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
3. Paying Agent and Registrar
Initially, Texas Commerce Bank National Association, a
national banking association (the "Trustee"), will act as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent, Registrar or
co-registrar without notice. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of September 19, 1997 (the "Indenture"), between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"TIA"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms, and Securityholders are referred to the Indenture and the TIA for a
statement of those terms.
The Securities are general unsecured obligations of the
Company limited to $150,000,000 aggregate principal amount at any one time
outstanding (subject to Sections 2.01 and 2.08 of the Indenture). [This
Security is one of the Original Securities referred to in the Indenture issued
in an aggregate principal amount of $100,000,000. The Securities include the
Original Securities, up to $50,000,000 aggregate principal amount of additional
Initial Securities that may be issued under the Indenture and any Exchange
Securities issued in exchange for Initial Securities. The Original Securities,
such additional Initial Securities and the Exchange Securities are treated as a
single class of securities under the Indenture.] [This Security is one of up
to $50,000,000 aggregate principal amount of additional Initial Securities that
may be issued
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under the Indenture. The Securities include such additional Securities, the
Original Securities in an aggregate principal amount of $100,000,000 previously
issued under the Indenture and any Exchange Securities issued in exchange for
Initial Securities. The additional Initial Securities, the Original Securities
and the Exchange Securities are treated as a single class of securities under
the Indenture.] The Indenture imposes certain limitations on the ability of
the Company and its Restricted Subsidiaries to, among other things, make
certain Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
issue or sell shares of capital stock of such Restricted Subsidiaries, enter
into or permit certain transactions with Affiliates, create or incur Liens and
make Asset Sales. The Indenture also imposes limitations on the ability of the
Company or any Subsidiary Guarantor to consolidate or merge with or into any
other Person or convey, transfer or lease all or substantially all of the
Property of the Company or any Subsidiary Guarantor.
To guarantee the due and punctual payment of the principal and
interest on the Securities and all other amounts payable by the Company under
the Indenture and the Securities when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of
the Securities and the Indenture, the Subsidiary Guarantors will
unconditionally guarantee the Obligations on a senior subordinated basis
pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth in the next paragraph, the Securities may
not be redeemed prior to September 15, 2002. On and after that date, the
Company may redeem the Securities
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7
in whole at any time or in part from time to time at the following redemption
prices (expressed in percentages of principal amount), plus accrued and unpaid
interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date that is on or prior to the date of redemption), if
redeemed during the 12-month period beginning on or after September 15 of the
years set forth below:
Redemption
Period Price
------ -----
2002 . . . . . . . . . . . . . 104.375%
2003 . . . . . . . . . . . . . 102.917%
2004 . . . . . . . . . . . . . 101.458%
2005 and thereafter . . . . . . 100.000%
Notwithstanding the foregoing, prior to September 15, 2000,
the Company may redeem, at any time or from time to time, up to 331/3% of the
aggregate principal amount of Securities originally issued, at a redemption
price of 108.750% of the principal amount thereof plus accrued and unpaid
interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date that is on or prior to the date of redemption) with the
net proceeds of one or more Equity Offerings of the Company, provided that at
least 662/3% of the aggregate principal amount of the Securities originally
issued remains outstanding after the occurrence of such redemption and
provided, further, that such redemption shall occur not later than 90 days
after the date of the closing of any such Equity Offering.
6. Sinking Fund
The Securities are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the
131
8
redemption date to each Holder of Securities to be redeemed at his or her
registered address. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If money sufficient to
pay the redemption price of and accrued interest on all Securities (or portions
thereof) to be redeemed on the redemption date is deposited with the Paying
Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
8. Subordination
The Securities are subordinated to Senior Indebtedness of the
Company. To the extent provided in the Indenture, Senior Indebtedness of the
Company must be paid before the Securities may be paid. In addition, each
Subsidiary Guaranty is subordinated to Senior Indebtedness of the relevant
Subsidiary Guarantor. The Company and each Subsidiary Guarantor agrees, and
each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give it
effect and appoints the Trustee as attorney-in-fact for such purpose.
9. Repurchase of Securities at the Option of Holders upon Change of Control
Upon a Change of Control, any Holder of Securities will have
the right, subject to certain conditions specified in the Indenture, to cause
the Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of purchase) as provided in, and subject to the terms of, the
Indenture.
132
9
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay
any taxes required by law or permitted by the Indenture. The Registrar need
not register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection of Securities to be redeemed or 15 days
before an interest payment date.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back
to the Company at its written request unless an abandoned property law
designates another Person. After any such payment, Holders entitled to the
money must look only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time may
terminate some of or all its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government Obligations
for the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
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10
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities and (ii)
any default or noncompliance with any provision may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder of Securities, the Company, the
Subsidiary Guarantors and the Trustee may amend the Indenture or the Securities
(i) to cure any ambiguity, omission, defect or inconsistency; (ii) to comply
with Article 5 of the Indenture; (iii) to provide for uncertificated Securities
in addition to or in place of certificated Securities; (iv) to make certain
changes in the subordination provisions; (v) to add Subsidiary Guaranties with
respect to the Securities and to remove such Subsidiary Guaranties as provided
by the terms thereof; (vi) to secure the Securities; (vii) to add additional
covenants or to surrender rights and powers conferred on the Company; (viii) to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the TIA; or (ix) to make any change
that does not adversely affect the rights of any Securityholder.
15. Defaults and Remedies
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the Securities, subject
to certain limitations, may declare all the Securities to be immediately due
and payable. Certain events of bankruptcy or insolvency are Events of Default
and shall result in the Securities being immediately due and payable upon the
occurrence of such Events of Default without any further act of the Trustee or
any Holder.
Holders of Securities may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities
134
11
unless it receives reasonable indemnity or security. Subject to certain
limitations, Holders of a majority in principal amount of the Securities may
direct the Trustee in its exercise of any trust or power under the Indenture.
The Holders of a majority in aggregate principal amount of the Securities, by
written notice to the Trustee and the Company, may rescind any declaration of
acceleration and its consequences if the rescission would not conflict with any
judgment or decree, and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of the acceleration.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or any Subsidiary Guarantor shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
18. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
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12
19. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A
(=Uniform Gift to Minors Act).
20. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Securities and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY HOLDER OF SECURITIES UPON
WRITTEN REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH
HAS IN IT THE TEXT OF THIS SECURITY.
136
13
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
____________________________________________________________
Date: ________________ Your Signature: _____________________
____________________________________________________________
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original
issuance of such Securities and the last date, if any, on which such Securities
were owned by the Company or any Affiliate of the Company, the undersigned
confirms that such Securities are being transferred in accordance with its
terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement under
the Securities Act of 1933; or
137
14
(3) [ ] inside the United States to a "qualified
institutional buyer" (as defined in Rule 144A under
the Securities Act of 1933) that purchases for its
own account or for the account of a qualified
institutional buyer to whom notice is given that such
transfer is being made in reliance on Rule 144A, in
each case pursuant to and in compliance with Rule
144A under the Securities Act of 1933; or
(4) [ ] outside the United States in an offshore transaction
within the meaning of Regulation S under the
Securities Act in compliance with Rule 904 under the
Securities Act of 1933; or
(5) [ ] to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933) that has furnished to the
trustee a signed letter containing certain
representations and agreements (the form of which
letter can be obtained from the Trustee or the
Company); or
(6) [ ] pursuant to another available exemption from
registration provided by Rule 144 under the
Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the
name of any person other than the registered holder thereof; provided,
however, that if box (4), (5) or (6) is checked, the Trustee may
require, prior to registering any such transfer of the Securities,
such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of
1933.
138
15
________________________
Your Signature
Signature Guarantee:
Date: _____________________ __________________________
Signature must be guaranteed Signature of Signature
by a participant in a Guarantee
recognized signature guaranty
medallion program or other
signature guarantor acceptable
to the Trustee
____________________________________________________________
139
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TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: ________________ ______________________________
NOTICE: To be executed by
an executive officer
140
17
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal mount of this Global Security is $
[ ]. The following increases or decreases in this Global Security have
been made:
Date of Amount of decrease in Amount of increase in Principal amount of Signature of authorized
Exchange Principal Amount of Principal Amount of this this Global Security signatory of Trustee or
this Global Security Global Security following such Securities Custodian
decrease or increase
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18
OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS SECURITY PURCHASED
BY THE COMPANY PURSUANT TO SECTION 4.06 OR 4.09 OF THE INDENTURE, CHECK THE
BOX:
/ /
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS
SECURITY PURCHASED BY THE COMPANY PURSUANT TO SECTION 4.06 OR 4.09 OF THE
INDENTURE, STATE THE AMOUNT: $
DATE: __________________ YOUR SIGNATURE: __________________
(SIGN EXACTLY AS YOUR NAME APPEARS
ON THE OTHER SIDE OF THE SECURITY)
SIGNATURE GUARANTEE:_______________________________________
SIGNATURE MUST BE GUARANTEED BY A PARTICIPANT
IN A RECOGNIZED SIGNATURE GUARANTY MEDALLION
PROGRAM OR OTHER SIGNATURE GUARANTOR
ACCEPTABLE TO THE TRUSTEE
142
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY]
No. $__________
83/4% Senior Subordinated Note due 2007
CUSIP No. ______
Stone Energy Corporation, a Delaware corporation,
promises to pay to , or registered assigns,
----------------
the principal sum of Dollars on September 15, 2007.
---------------
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
143
2
Additional provisions of this Security are set forth on the other
side of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to be
duly executed.
STONE ENERGY CORPORATION,
by
-----------------------------
Name:
Title:
By
-----------------------------
Name:
Title:
[CORPORATE SEAL]
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by _____________________________
Authorized Signatory
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3
-------------------------
*/ If the Security is to be issued in global form, add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".
145
4
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
83/4% Senior Subordinated Note due 2007
1. Interest. Stone Energy Corporation, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on
the principal amount of this Security at the rate per annum shown above. The
Company will pay interest semiannually on March 15 and September 15 of each
year. Interest on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from
[ ]. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. The Company shall pay interest on overdue principal at
the rate borne by the Securities plus 1% per annum, and it shall pay interest
on overdue installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the March 1 or September 1 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in
money of the United States of America that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company. The Company will make all
payments in respect of a certificated Security (including principal, premium
and interest), by mailing a check to the registered address of each Holder
thereof; provided, however, that payments on the Securities may also be made,
in the case of a Holder of at least $1,000,000 aggregate
146
5
principal amount of Securities, by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).
3. Paying Agent and Registrar
Initially, Texas Commerce Bank National Association, a national
banking association (the "Trustee"), will act as Paying Agent and Registrar.
The Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly
Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
September 19, 1997 (the "Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"TIA"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms, and Securityholders are referred to the Indenture and the TIA for a
statement of those terms.
The Securities are general unsecured obligations of the Company
limited to $150,000,000 aggregate principal amount at any one time outstanding
(subject to Sections 2.01 and 2.08 of the Indenture). This Security is one of
the Exchange Securities referred to in the Indenture issued in exchange for
Initial Securities. The Securities include the Exchange Securities, the
Original Securities in the aggregate principal amount of $100,000,000 and up to
$50,000,000 aggregate principal amount of additional Initial Securities. The
Exchange Securities, the Original Securities and such
147
6
additional Initial Securities are treated as a single class of securities under
the Indenture. The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
issue or sell shares of capital stock of such Restricted Subsidiaries, enter
into or permit certain transactions with Affiliates, create or incur Liens and
make Asset Sales. The Indenture also imposes limitations on the ability of the
Company or any Subsidiary Guarantor to consolidate or merge with or into any
other Person or convey, transfer or lease all or substantially all of the
Property of the Company or any Subsidiary Guarantor.
To guarantee the due and punctual payment of the principal and
interest, if any, on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be
due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, the Subsidiary Guarantors
will unconditionally guarantee the Obligations on a senior subordinated basis
pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth in the next paragraph, the Securities may not
be redeemed prior to September 15, 2002. On and after that date, the Company
may redeem the Securities in whole at any time or in part from time to time at
the following redemption prices (expressed in percentages of principal amount),
plus accrued and unpaid interest, if any, to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date that is on or prior to the date of
redemption), if redeemed during the 12-month period beginning on or after
September 15 of the years set forth below:
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7
Period
Redemption
Price
-----
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . 104.375%
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . 102.917%
2004 . . . . . . . . . . . . . . . . . . . . . . . . . . 101.458%
2005 and thereafter . . . . . . . . . . . . . . . . . . . 100.000%
Notwithstanding the foregoing, prior to September 15, 2000, the
Company may redeem, at any time or from time to time, up to 331/3% of the
aggregate principal amount of Securities originally issued, at a redemption
price of 108.750% of the principal amount thereof plus accrued and unpaid
interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date that is on or prior to the date of redemption) with the
net proceeds of one or more Equity Offerings of the Company, provided that at
least 662/3% of the aggregate principal amount of the Securities originally
issued remains outstanding after the occurrence of such redemption and
provided, further, that such redemption shall occur not later than 90 days
after the date of the closing of any such Equity Offering.
6. Sinking Fund
The Securities are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least
30 days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his or her registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date
interest ceases to accrue on such Securities (or such portions thereof) called
for redemption.
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8. Subordination
The Securities are subordinated to Senior Indebtedness of the
Company. To the extent provided in the Indenture, Senior Indebtedness of the
Company must be paid before the Securities may be paid. In addition, each
Subsidiary Guaranty is subordinated to Senior Indebtedness of the relevant
Subsidiary Guarantor. The Company and each Subsidiary Guarantor agrees, and
each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give it
effect and appoints the Trustee as attorney-in-fact for such purpose.
9. Repurchase of Securities at the Option of Holders upon Change of Control
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions specified in the Indenture, to cause the
Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of purchase) as provided in, and subject to the terms of, the
Indenture.
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay
any taxes required by law or permitted by the Indenture. The Registrar need
not register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange
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any Securities for a period of 15 days prior to a selection of Securities to be
redeemed or 15 days before an interest payment date.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back
to the Company at its written request unless an abandoned property law
designates another Person. After any such payment, Holders entitled to the
money must look only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time may
terminate some of or all its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government Obligations
for the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities and (ii)
any default or noncompliance with any provision may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder of Securities, the Company, the
Subsidiary Guarantors and the Trustee may amend the Indenture or the Securities
(i) to cure any ambiguity, omission, defect or inconsistency; (ii) to comply
with
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Article 5 of the Indenture; (iii) to provide for uncertificated Securities in
addition to or in place of certificated Securities; (iv) to make certain
changes in the subordination provisions; (v) to add Subsidiary Guaranties with
respect to the Securities and to remove such Subsidiary Guaranties as provided
by the terms thereof; (vi) to secure the Securities; (vii) to add additional
covenants or to surrender rights and powers conferred on the Company; (viii) to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the TIA; or (ix) to make any change
that does not adversely affect the rights of any Securityholder.
15. Defaults and Remedies
If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the Securities, subject to
certain limitations, may declare all the Securities to be immediately due and
payable. Certain events of bankruptcy or insolvency are Events of Default and
shall result in the Securities being immediately due and payable upon the
occurrence of such Events of Default without any further act of the Trustee or
any Holder.
Holders of Securities may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of
any trust or power under the Indenture. The Holders of a majority in aggregate
principal amount of the Securities, by written notice to the Trustee and the
Company, may rescind any declaration of acceleration and its consequences if
the rescission would not conflict with any judgment or decree, and if all
existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration.
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16. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it
were not Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or any Subsidiary Guarantor shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
18. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A
(=Uniform Gift to Minors Act).
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20. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Securities and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY HOLDER OF SECURITIES UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN
IT THE TEXT OF THIS SECURITY.
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
____________________________________________________________
Date: ________________ Your Signature: _____________________
____________________________________________________________
Sign exactly as your name appears on the other side of this Security.
Signature must be guaranteed by a participant in a recognized signature
guaranty medallion program or other signature guarantor acceptable to the
Trustee.
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OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS SECURITY PURCHASED BY
THE COMPANY PURSUANT TO SECTION 4.06 OR 4.09 OF THE INDENTURE, CHECK THE BOX:
[ ]
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS SECURITY
PURCHASED BY THE COMPANY PURSUANT TO SECTION 4.06 OR 4.09 OF THE INDENTURE,
STATE THE AMOUNT:
$
DATE: __________________ YOUR SIGNATURE: __________________
(SIGN EXACTLY AS YOUR NAME APPEARS
ON THE OTHER SIDE OF THE SECURITY)
SIGNATURE GUARANTEE:_______________________________________
SIGNATURE MUST BE GUARANTEED BY A PARTICIPANT IN A
RECOGNIZED SIGNATURE GUARANTY MEDALLION PROGRAM OR
OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE
TRUSTEE.
156
EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental
Indenture") dated as of , among
[SUBSIDIARY GUARANTOR] (the "New Subsidiary Guarantor"), a
subsidiary of Stone Energy Corporation (or its successor),
a Delaware corporation (the "Company"), STONE ENERGY
CORPORATION, on behalf of itself and the Subsidiary
Guarantors (the "Existing Subsidiary Guarantors") under
the Indenture referred to below, and Texas Commerce Bank
National Association, a national banking association, 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 September 19, 1997,
providing for the issuance of an aggregate principal amount of up to
$150,000,000 of 83/4% Senior Subordinated Notes due 2007 (the "Securities");
WHEREAS Section 4.13 of the Indenture provides that under certain
circumstances the Company is required to cause the New Subsidiary Guarantor to
execute and deliver to the Trustee a supplemental indenture pursuant to which
the New Subsidiary Guarantor shall unconditionally guarantee all the Company's
obligations under the Securities pursuant to a Subsidiary Guaranty on the terms
and conditions set forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee,
the Company and the Existing Subsidiary Guarantors are authorized to execute
and deliver this Supplemental Indenture;
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NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the New Subsidiary Guarantor, the Company, the Existing Subsidiary Guarantors
and the Trustee mutually covenant and agree for the equal and ratable benefit
of the holders of the Securities as follows:
1. Agreement to Guarantee. The New Subsidiary Guarantor hereby
agrees, jointly and severally with all other Subsidiary Guarantors, to
unconditionally guarantee the Company's obligations under the Securities on the
term and subject to the conditions set forth in Article 11 of the Indenture and
to be bound by all other applicable provisions of the Indenture.
2. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all
respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This Supplemental Indenture
shall form a part of the Indenture for all purposes, and every holder of
Securities heretofore or hereafter authenticated and delivered shall be bound
hereby.
3. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
4. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental
Indenture.
5. 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.
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6. Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.
[NEW SUBSIDIARY GUARANTOR],
by
------------------------------
Name:
Title:
STONE ENERGY CORPORATION, on
behalf of itself and the
Existing Subsidiary Guarantors,
by
------------------------------
Name:
Title:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee,
by
------------------------------
Name:
Title:
