SUPPLEMENTAL INDENTURE
among MAGNUM HUNTER RESOURCES, INC.,
the SUBSIDIARY GUARANTORS parties hereto
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as trustee
THIS SUPPLEMENTAL INDENTURE (the "Supplemental Indenture") is made as
of the ____th day of January, 1999 by and among Magnum Hunter Resources, Inc., a
Nevada corporation (the "Company"), and each of the Subsidiary Guarantors
signatory hereto (the "Initial Guarantors"), and First Union National Bank of
North Carolina, as trustee (the "Trustee").
RECITALS:
WHEREAS, the Company, the Initial Guarantors and the Trustee have
entered into an indenture dated as of May 29, 1997 (the "Indenture") (all terms
defined in the Indenture shall have the same meanings in this Supplemental
Indenture unless otherwise defined herein);
WHEREAS, Article Nine of the Indenture provides a manner by which the
Indenture may be amended with the consent of the Holders of at least a majority
in aggregate principal amount of the then outstanding Notes; and
WHEREAS, the Holders of at least a majority in aggregate principal
amount of the outstanding Notes have delivered said consents to the Company's
tabulation agent; and
WHEREAS, pursuant to and in accordance with Section 9.02 of the
Indenture, and with the consent of the Holders of at least a majority in
aggregate principal amount of the outstanding Notes, the Company, the Initial
Guarantors and the Trustee have agreed to enter into this Supplemental
Indenture;
NOW, THEREFORE, each party hereto agrees as follows for the benefit of
each other party and for the equal and ratable benefit of the Holders of the
Notes:
1. Section 4.10 of the Indenture is amended to read in its entirety as follows:
SECTION 4.10. Limitation on Restricted Payments.
The Company will not, and will not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly,
(i) declare or pay any dividend or make any distribution (other than
dividends or distributions made to the Company or any Wholly-Owned Restricted
Subsidiary and other than any dividends or distributions payable solely in
Qualified Capital Stock of the Company or warrants, rights or options to
purchase or acquire shares of Qualified Capital Stock of the Company) on or in
respect of shares of the Capital Stock of the Company or any Restricted
Subsidiary to holders of such Capital Stock;
(ii) purchase, redeem or otherwise acquire or retire for value any Capital
Stock of the Company or any Restricted Subsidiary or any warrants, rights or
options to purchase or acquire shares of any class of such Capital Stock other
than through the exchange therefor solely of Qualified Capital Stock of the
Company or warrants, rights or options to purchase or acquire shares of
Qualified Capital Stock of the Company;
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(iii) make any principal payment on, purchase, defease, redeem, prepay,
decrease or otherwise acquire or retire for value, prior to any scheduled final
maturity, scheduled repayment or scheduled sinking fund payment, any
Indebtedness of the Company or a Subsidiary Guarantor that is subordinate or
junior in right of payment to the Notes or such Subsidiary Guarantor's
Guarantee, as the case may be; or
(iv) make any Investment (other than a Permitted Investment)
(each of the foregoing actions set forth in clauses (i), (ii), (iii) and
(iv) being referred to as a "Restricted Payment"), if at the time of such
Restricted Payment or immediately after giving effect thereto, (a) a Default or
an Event of Default shall have occurred and be continuing, or (b) the Company is
not able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.12, or (c) the aggregate
amount of Restricted Payments (including such proposed Restricted Payment) made
subsequent to the Issue Date (the amount expended for such purposes, if other
than in cash, being the fair market value of such property as determined
reasonably and in good faith by the Board of Directors of the Company) shall
exceed the sum of:
(A) 50% of the cumulative Consolidated Net Income (or if cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company
earned subsequent to the Issue Date and on or prior to the last date of the
Company's fiscal quarter immediately preceding such Restricted Payment (the
"Reference Date") (treating such period as a single accounting period); plus
(B) 100% of the aggregate net cash proceeds received by the Company from
any Person (other than a Restricted Subsidiary of the Company) from the issuance
and sale subsequent to the Issue Date and on or prior to the Reference Date of
Qualified Capital Stock of the Company; plus
(C) without duplication of any amounts included in the immediately
preceding subclause (B), 100% of the aggregate net cash proceeds of any equity
contribution received by the Company from a holder of the Company's Capital
Stock (excluding in the case of the immediately preceding clause (B) and this
clause (C), any net cash proceeds from an Equity Offering to the extent used to
redeem the Notes); plus
(D) an amount equal to the net reduction in Investments in Unrestricted
Subsidiaries resulting from dividends, interest payments, repayments of loans or
advances, or other transfers of cash, in each case to the Company or to any
Restricted Subsidiary of the Company from Unrestricted Subsidiaries (but without
duplication of any such amount included in calculating cumulative Consolidated
Net Income of the Company), or from redesignations of Unrestricted Subsidiaries
as Restricted Subsidiaries (in each case valued as provided in Section 4.14),
not to exceed, in the case of any Unrestricted Subsidiary, the amount of
Investments previously made by the Company or any Restricted Subsidiary in such
Unrestricted Subsidiary and which was treated as a Restricted Payment hereunder;
plus
(E) without duplication of the immediately preceding subclause (D), an
amount equal to the lesser of the cost or net cash proceeds received upon the
sale or other disposition of any Investment made after the Issue Date which had
been treated as a
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Restricted Payment (but without duplication of any such amount included in
calculating cumulative Consolidated Net Income of the Company).
Notwithstanding the foregoing, the provisions set forth above will not
prohibit:
(1) The payment of any dividend or redemption payment within 60 days after
the date of declaration of such dividend or the applicable redemption if the
dividend or redemption payment, as the case may be, would have been permitted on
the date of declaration;
(2) If no Default or Event of Default shall have occurred and be
continuing, the acquisition of any shares of Capital Stock of the Company,
through the application of net proceeds of a substantially concurrent sale for
cash (other than to a Restricted Subsidiary of the Company) of shares of
Qualified Capital Stock of the Company;
(3) If no Default or Event of Default shall have occurred and be
continuing, the acquisition of any Indebtedness of the Company or Subsidiary
Guarantor that is subordinate or junior in right of payment to the Notes or such
Subsidiary Guarantor's Guarantee, as the case may be, either (a) solely in
exchange for shares of Qualified Capital Stock of the Company or warrants,
rights or options to purchase or acquire shares of Qualified Capital Stock of
the Company, or (b) through the application of net proceeds of a substantially
concurrent sale for cash (other than to a Restricted Subsidiary of the Company)
of (i) shares of Qualified Capital Stock of the Company or (ii) Refinancing
Indebtedness;
(4) If no Default or Event of Default shall have occurred and be
continuing, the redemption of the TCW Preferred Stock to the extent required
pursuant to the terms thereof as a result of the Company not having received at
least $15 million of net cash proceeds from the issuance and sale by the Company
of Common Stock; and
(5) If no Default or Event of Default shall have occurred and be
continuing, the payment of (i) dividends on the TCW Preferred Stock and (ii)
cumulative cash dividends of up to 8% per annum with respect to additional
preferred stock of the Company with a liquidation preference of up to $50
million, if such additional preferred stock is issued to ONEOK, Inc. (or an
affiliate) on or before March 31, 1999; and
(6) The initial designation of Xxxxxx Xxxxxxx International Limited
Liability Company as an Unrestricted Subsidiary.
In determining the aggregate amount of Restricted Payments made subsequent
to the Issue Date in accordance with clause (c) of this Section 4.10, amounts
expended pursuant to clauses (1), (2), (4), (5) and (6) shall be included in
such calculation.
2. Section 9.04 of the Indenture is amended to read in its entirety as
follows:
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SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder of
a Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. Subject
to the following paragraph, any such Holder or subsequent Holder may revoke the
consent as to such Holder's Note or portion of such Note by notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Notes have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver. An amendment, supplement or waiver becomes
effective upon receipt by the Trustee of such Officers' Certificate and evidence
of consent by the Holders of the requisite percentage in principal amount of
outstanding Notes.
The Company may, but shall not be obligated to, fix a Record Date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a Record Date is fixed, then notwithstanding the second
sentence of the immediately preceding paragraph, those Persons who were Holders
at such Record Date (or their duly designated proxies), and only those Persons,
shall be entitled to revoke any consent previously given, whether or not such
Persons continue to be Holders after such Record Date. No such consent shall be
valid or effective for more than 90 days after such Record Date unless consents
from Holders of the requisite percentage in principal amount of outstanding
Notes required hereunder for the effectiveness of such consents shall have also
been given and not revoked within such 90 day period.
3. Upon the execution and delivery of this Supplemental Indenture by the
Company, the Initial Guarantors and the Trustee, the Indenture shall be
supplemented in accordance herewith, and this Supplemental Indenture shall form
a part of the Indenture for all purposes, and every Holder of Notes heretofore
or hereafter authenticated and delivered under the Indenture shall be bound
thereby.
4. Except as supplemented hereby, all provisions in the Indenture shall
remain in full force and effect. This Supplemental Indenture is an indenture
supplemental to and in implementation of the Indenture, and the Indenture and
this Supplemental Indenture shall henceforth be read and construed together. The
Indenture as supplemented by this Supplemental Indenture is in all respects
confirmed and preserved.
5. In case any provision of this Supplemental Indenture shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
6. Nothing in this Supplemental Indenture, the Indenture or the Notes,
express or implied, shall give to any Person, other than the parties hereto and
thereto and their successors hereunder and thereunder and the Holders of Notes,
any benefit of any legal or equitable right, remedy or claim under the
Indenture, this Supplemental Indenture or the Notes.
7. The recitals contained herein shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. In
entering into this Supplemental Indenture, the Trustee shall be entitled to the
benefit of every provision of the Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee, whether or not
elsewhere herein so provided.
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8. This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflicts of law principles thereof.
9. This Supplemental Indenture may be executed in counterparts, each of
which, when so executed, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first written above.
MAGNUM HUNTER RESOURCES, INC.
By:
Name:
Title:
MAGNUM HUNTER PRODUCTION, INC., as Guarantor
By:
Name:
Title:
GRUY PETROLEUM MANAGEMENT COMPANY, as
Guarantor
By:
Name:
Title:
HUNTER GAS GATHERING, INC., as Guarantor
By:
Name:
Title:
RAMPART PETROLEUM, INC., as Guarantor
By:
Name:
Title:
CONMAG ENERGY CORPORATION, as Guarantor
By:
Name:
Title:
0
XXXXX XXXXX XXXXXXXX XXXX XX XXXXX
XXXXXXXX, as Trustee
By:
Name:
Title:
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